F3T2 Econ 3 Firms and Production

Households...

• Are units of production
• Consume goods and services produced by firms

• Receive factor services such as labour and capital from firms
• Use factor services to produce goods and services

It is not considered production when...

• Money is not made
• The purpose is to satisfy their own wants
• It does not take place in an office or factory
• It has an input and output

Which of the following is not an example of production

• A child selling flags to earn money for charity
• A tutor tutoring a girl
• A mother cooks for her family
• A girl plays video games at home

T/F: Capital goods are used for direct consumption

• T
• F

Which of the following is a consumer good?

• Books for leisure reading
• Computers in a classroom
• Chairs in an office

• Lights in a cafe

Which of the following is not why division of labour can raise average labour productivity

• Practice makes perfect
• Stimulus to mechanism
• Choosing the most suitable workers for each job
• Economy of capital good

Which of the following are disadvantages of division of labour

• Monotony of work
• Risk of unemployment
• Wastes time
• Loss of craftsmanship

Why does division of labour result in the over-standardisation of products

• Variety of design may be limited due to the use of machines
• Trade barriers limit production
• The size of market is too small
• Workers specialise in one part of the whole production process only

T/F: A teacher engages in teritary production only

• T
• F

T/F: Dividends fluctuates with the profits of the company

• T
• F