Factors of Production
The mental and physical effort of human used in the production process.
What is labour?
Production efficiency is achieved when the ... cost of production is the lowest.
What is achieved when the average cost of production is the lowest?
The increase in production scale is achieved by...
What can "increasing the use of all types of factors of production" result in?
Having market power means that firms have the ability to...
Why can some firms charge different (or higher) prices than the others?
The difference in wage income can be explained by...
How does any of the following affect wage income, education/qualification, training/skills, experience, labour market conditions?
The profit return to the enterprise is uncertain, due to this key function of the enterprise.
Traditionally, the most straightforward way to increase labour productivity is to...
How does increasing the use of capital goods improve labour productivity?
The decrease in the average cost of production due to the growth of the industry and general economic conditions, instead of the scale of the firm itself.
What is external economies of scale?
The market structure in which there are a small number of LARGE firms dominating.
What is oligopoly?
The type of unemployment that is resulted from structural change...
What is structural unemployment?
The amount of capital goods available in the economy is linked with these two expenditures in the components of AD.
What impact do investment expenditure and government expenditure have on the amount of capital?
It is believed that firms in a market are able to produce closer to the productive efficiency condition when they are facing intense...
What's a benefit of intense competition in market in terms of cost of production?
When a firm experiences internal economies of scale by raising its own output level, the average cost can be driven down because the ... cost is spread out across the larger quantity of output.
How is the average cost of production affected by the fixed cost when output level grows?
The most direct negative impacts of market concentration on consumers are the loss of choices of product range and...
Why are prices higher when the market is concentrated?
The growth of trade would intensify the uneven distribution of income and wealth because while some industries grow, some others collapse. This is called...
What is structural change?
The quantity of this type of factors of production is fixed in the short run; while it may change in the long run, it cannot be increased by human effort.
What's special about the quantity of "land" as a productive resource?
It is believed that nations are able to improve productive efficiency when they engage in international trade. This is because of ...
How does specialisation of nations impact their productive efficiency?
In terms of administration cost, diseconomies of scale (rising average cost) can happen when a firm is growing TOO big in scale. One possible reason of this is...
What problem would communication issue, bureaucracy, complacency, overlapping business function, complicated organisation structure lead to?
The market power held by many large firms is due to barriers to entry created by the government such as laws, patents, registrations and qualification requirements. The process to abolish these requirements to increase competition is called...
What is deregulation?
The statistical index which shows the level of inequality in a nation; the larger the number, the more severe inequality is.
When less input is needed to produce the same amount of output, it is called...
What is productivity growth?
Domestic firms that produce "import substitution" would be losing business if the domestic market is fully opened up to cheaper imports. A possible government intervention to prevent this is...
What is the function of a tariff or a quota on import?
When a region of a nation has the ability to grow its production scale and boost it export of certain goods and services, it is called...
Hint: a trade theory
What is competitive advantage?
Multinational corporations (MNCs) tend to grow very quickly and could soon outperform the local firms when they enter the new market of the host country. This is because their strong financial background from the home country enables them to overcome the barrier to entry of...
What are capital requirements?
Among these two types of efficiency, ... tends to be more severe in most economies.
Why is inequality of wealth usually more severe?