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WorksheetsOperations Review Part 2 (A2 Business)
Total questions: 20
Worksheet time: 2hrs 40mins
Fill in the blank. As capacity utilisation increases towards 100%, unit costs should ____________.
Increase
Decrease
Stay the same
None of the answers
A business has 45 employees. In 2018, it produced an output of 10,800 chairs. In 2019, with the same employees, it produced 16,200 chairs. What was the percentage increase in labour productivity from 2018 to 2019?
50%
33.3%
48%
35%
None of the answers
A business has 45 employees in 2018 and produces an output of 9,000 chairs. In 2019, it hires 10 more employees, but its output is still 9,000. What was the percentage decrease in labour productivity from 2018 to 2019?
18.2%
20.1%
22.2%
16.7%
None of the answers
Select all of the ways a business could increase labour productivity:
Invest in technology
Improve training
Change the way employees are rewarded
Change the way the work is organised
Improve marketing
Select all the possible challenges of increasing labour productivity
Quality may suffer
Might be resisted by employees
Employees might demand higher pay
None of the answers
What is the formula for calculating labour productivity?
total output/number of employees
number of employees/total output
total costs/total output
(existing output/maximum possible output) * 100
fixed costs + variable costs
If a firm's maximum possible output is 10,800 chairs and its current output is 9,600 chairs, what is its capacity?
10,800 chairs
9,600 chairs
88.9%
90%
11.1%
If a firm's maximum possible output is 10,800 chairs and its current output is 9,600 chairs, what is its capacity utilisation?
10,800 chairs
9,600 chairs
88.9%
90%
11.1%
If a firm's capacity in 2018 is 21,600 chairs and its output in 2018 is 9,600 chairs, what is its capacity utilisation?
21,600 chairs
9,600 chairs
44.4%
55.5%
None of the answers
A firm's capacity of 16,000 chairs stays the same in 2018 to 2019, but its capacity utilisation increases from 75% to 90%. What is its outputs in 2018 and 2019 respectively?
12,000 and 14,400
7,500 and 9,000
12,000 and 15,000
11,000 and 14,400
12,000 and 14,000
Select all of the actions a firm might do to combat low capacity utilisation:
Improve marketing
Downsize
Create a waiting list
Temporarily pushing prices up
Outsource to other producers
Select all of the actions a firm might do to combat high capacity utilisation:
Improve marketing
Downsize
Create a waiting list
Temporarily pushing prices up
Outsource to other producers
Select all the problems of too high capacity utilisation:
Business unable to accept new orders
Customers go to alternative providers
Employees and workers might burn out
There are no problems with high capacity utilisation
What is the term that measures how well inputs are used to generate output?
Efficiency
Capacity
Unit costs
Quality
Flexibility
True or False. If a process becomes more efficient, it uses fewer inputs to produce a given output.
True
False
Select all of the possible challenges of using outsourcing as a strategy for high capacity utilisation:
Takes time to negotiate
Possibly more expensive than in-house
Less control over quality
None of the answers
A firm's capacity of 16,000 chairs stays the same in 2018 to 2019, but its capacity utilisation increases from 75% to 90%. What should happen to its unit costs?
Increase
Decrease
Stay the same
None of the answers
A firm's output in 2018 is 15,000 chairs. Its variable costs are £30,000. Its unit costs are £8 per chair. What are its fixed costs?
£90,000
£15,000
£30,000
£80,000
£70,000
A firm's capacity is 80,000 chairs. It has a 75% capacity utilisation. Its total costs are £120,000, and it has 2,000 employees. What are its unit costs?
£2 per chair
£40 per chair
£1.5 per chair
£1.13 per chair
Not enough information
A firm's capacity is 80,000 chairs. It has a 75% capacity utilisation. Its total costs are £120,000, and it has 2,000 employees. What is its labour productivity?
30 chairs per employee
40 chairs per employee
50 chairs per employee
60 chairs per employee
Not enough information
