Economics Production Quiz
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Questions and Answers

Which of the following is considered a production activity?

  • Eating
  • Homework
  • Housework (correct)
  • Watching movies

What best defines production?

  • Engaging in recreational activities
  • Turning inputs into outputs (correct)
  • The act of consuming resources
  • The process of purchasing goods

Which of the following is an input in the production process?

  • Completed tasks
  • Crops
  • Music albums
  • Sunshine (correct)

Which of the following activities is excluded from the definition of production?

<p>Farming (A)</p> Signup and view all the answers

What distinguishes production activities from others in terms of monetary return?

<p>They do not always involve a monetary return. (A)</p> Signup and view all the answers

What defines a private good?

<p>It is rival and excludable. (D)</p> Signup and view all the answers

Which of the following is an example of a public good?

<p>National defense (A)</p> Signup and view all the answers

Which characteristic describes public goods?

<p>They are non-rival and non-excludable. (B)</p> Signup and view all the answers

Why are public goods often subject to free-riding?

<p>It is too costly to prevent consumption by non-payers. (B)</p> Signup and view all the answers

What distinguishes public goods from private goods?

<p>Public goods are non-rival and non-excludable. (B)</p> Signup and view all the answers

What is the primary focus of tertiary production?

<p>Providing various kinds of services (C)</p> Signup and view all the answers

Which activity is an example of secondary production?

<p>Manufacturing (A)</p> Signup and view all the answers

How do primary and secondary productions relate to one another?

<p>Primary production supplies raw materials to secondary production (D)</p> Signup and view all the answers

Which statement correctly describes tertiary production?

<p>Tertiary production provides intangible services (B)</p> Signup and view all the answers

Which is NOT an example of primary production?

<p>Manufacturing (C)</p> Signup and view all the answers

What is the primary purpose of consumer goods?

<p>To satisfy human wants directly (A)</p> Signup and view all the answers

Which of the following is an example of a producer good?

<p>iPad for order taking (A)</p> Signup and view all the answers

Under what circumstance does a good become a consumer good?

<p>When it is purchased for personal enjoyment (A)</p> Signup and view all the answers

What distinguishes producer goods from consumer goods?

<p>Producer goods are utilized in production processes (C)</p> Signup and view all the answers

An oven used for baking cakes for sale is categorized as what type of good?

<p>Producer good (D)</p> Signup and view all the answers

Which of the following scenarios exemplifies the use of a consumer good?

<p>A car used for personal travel (A)</p> Signup and view all the answers

How can the same good serve as both a consumer good and a producer good?

<p>Based on the owner's intention for use (A)</p> Signup and view all the answers

What is an example of a consumer good that also has a producer function?

<p>An iPad for playing games (D)</p> Signup and view all the answers

What is an example of simple division of labor?

<p>A chef specializing in cooking (A)</p> Signup and view all the answers

Which type of division of labor involves a region specializing in certain goods?

<p>Regional Division of Labor (A)</p> Signup and view all the answers

What type of good is a rubbish bin on the street classified as?

<p>Not public good (D)</p> Signup and view all the answers

How does practice impact labor productivity in division of labor?

<p>It increases skill and efficiency (D)</p> Signup and view all the answers

What is a consumer good?

<p>A good used by individuals for personal use (A)</p> Signup and view all the answers

What is a benefit of specialization in division of labor?

<p>Higher labor productivity (A)</p> Signup and view all the answers

Which of the following goods is an example of a private good?

<p>A firework (C)</p> Signup and view all the answers

What characteristic does chocolate have in terms of exclusivity and rivalry?

<p>Excludable and rivalrous (D)</p> Signup and view all the answers

Which of the following statements correctly describes a producer good?

<p>A product used in the production of other goods (C)</p> Signup and view all the answers

What is true about complex division of labor?

<p>Each worker focuses on a specific production stage. (A)</p> Signup and view all the answers

What type of good is a rubbish bin in Mr. Chan's home?

<p>Private good (D)</p> Signup and view all the answers

When is a desktop computer considered a consumer good?

<p>When used at home for gaming or personal tasks (C)</p> Signup and view all the answers

Which good can be classified as non-excludable?

<p>Rubbish bin on the street (C)</p> Signup and view all the answers

In what situation is a Dyson hair dryer categorized as a producer good?

<p>When it is sold in a salon or shop (A)</p> Signup and view all the answers

Which of the following statements is true about goods?

<p>A good can function as both consumer and producer depending on its use. (B)</p> Signup and view all the answers

What is a disadvantage of the division of labour that affects worker satisfaction?

<p>Work becomes boring (D)</p> Signup and view all the answers

What impact does division of labour have on workers' skills?

<p>Workers focus on developing a single skill (C)</p> Signup and view all the answers

How does division of labour affect capital goods?

<p>Tools are used more efficiently (B)</p> Signup and view all the answers

What is a potential risk associated with the increased mechanization from division of labour?

<p>Greater degree of interdependence (D)</p> Signup and view all the answers

What is a consequence of standardisation in mass production?

<p>Reduced customer choice of products (B)</p> Signup and view all the answers

What has been the trend in the tertiary sector's contribution to Hong Kong's GDP from 2005 to 2019?

<p>Increased significantly (C)</p> Signup and view all the answers

What is one reason for the decline in the primary sector in Hong Kong?

<p>Limited natural resources (C)</p> Signup and view all the answers

Which sector showed a percentage contribution of 7.6% to GDP in 2005?

<p>Secondary (B)</p> Signup and view all the answers

What is a potential reason for the decline of the secondary sector in Hong Kong?

<p>Mass relocation of factories to the Mainland (C)</p> Signup and view all the answers

As of 2019, what percentage contribution does the tertiary sector make to Hong Kong's GDP?

<p>93.50% (C)</p> Signup and view all the answers

Which of the following statements about the primary sector is true?

<p>It has become less significant due to urbanization. (A)</p> Signup and view all the answers

What have been the employment trends in the primary and secondary sectors in Hong Kong?

<p>Both sectors have seen a decline in employment. (C)</p> Signup and view all the answers

Which of the following categories does not represent a production activity in Hong Kong's context?

<p>Relocation of factories (A)</p> Signup and view all the answers

What type of division of labor would be most effective for products characterized by high originality and uniqueness?

<p>Functional division of labor (D)</p> Signup and view all the answers

Which scenario demonstrates a limitation of division of labor due to the size of the market?

<p>A bakery producing artisanal bread for a local community (B)</p> Signup and view all the answers

In coffee bean production, which type of division of labor could be applied if different regions specialize in various stages of production?

<p>Inter-regional division of labor (B)</p> Signup and view all the answers

Which of the following occupations represents a functional division of labor in a restaurant setting?

<p>Cooks preparing meals (A)</p> Signup and view all the answers

What is a key advantage of applying division of labor in production processes?

<p>It allows for mass production of identical products (D)</p> Signup and view all the answers

Flashcards

What is Production?

The process of transforming inputs (e.g., resources, labor) into outputs (e.g., goods, services).

What are Inputs?

Anything used in the production process, like materials, labor, or tools.

What are Outputs?

The final product or service created through production.

Is Production Always Monetary?

Activities that transform inputs into outputs, even if they don't generate a financial return.

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What are Examples of Production?

Activities like painting, composing music, or writing code are also considered production.

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Consumer good

A good that is used directly by consumers to satisfy their wants and needs.

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Producer good

A good that is used by businesses or individuals to produce other goods or services.

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Dual use good

A good can be both a consumer good and a producer good depending on how it is used.

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Example of Dual Use Good

For example, a desktop computer used at home for entertainment is a consumer good, while a computer used in an office for work is a producer good.

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Hair Dryer: Consumer vs Producer

A Dyson hairdryer used to dry hair is a consumer good because it is used directly for personal use. However, if a salon sells a Dyson hairdryer, it is a producer good because it is used in a production process.

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What are goods?

Any item that satisfies human wants.

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When is a good a consumer good?

A good is a consumer good when it is used to satisfy the owner's personal needs or wants.

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When is a good a producer good?

A good is a producer good when it is used to produce other goods or services for others.

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iPad for playing games

An iPad used for leisure activities, like games.

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iPad for order taking

An iPad used by a business to take orders.

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Consumer vs. Producer Goods

The usage of a good determines whether it is a consumer or producer good.

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Rival good

A good where one person's consumption of the good prevents others from consuming it, often because it's physically impossible or there is a limited quantity.

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Non-excludable good

A good where it is costly or impossible to prevent people from consuming it, even if they haven't paid for it.

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Private good

A good that is both rival and excludable in consumption. One person's consumption prevents others from consuming it, and it's possible to prevent those who haven't paid from enjoying it.

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Public good

A good that is both non-rival and non-excludable in consumption. Anyone can enjoy it without diminishing the amount available for others, and it's difficult to prevent anyone from enjoying it.

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Free Rider

Individuals who benefit from a public good without contributing to its provision.

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What is excludability?

A good is excludable if it's possible to prevent people from using it, even if they're willing to pay for it.

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What is rivalry?

A good is rivalrous if one person's consumption prevents another person from consuming it.

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What is a public good?

A public good is non-excludable and non-rivalrous. This means everyone can use it without preventing anyone else, and one person's use doesn't reduce its availability to others.

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What is a private good?

A private good is excludable and rivalrous. This means that it is possible to prevent people from using the good and one person's consumption of the good prevents another person from consuming it.

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What is a "not a public good"?

A good is classified as "not a public good" if it is either excludable or rivalrous, but not both.

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Primary Production

Activities that extract raw materials from nature, such as fishing, mining, and farming.

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Secondary Production

Activities that turn raw materials into semi-finished or finished goods, like manufacturing, supply of gas/water.

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Tertiary Production

Activities that provide different kinds of services, such as retailing, education.

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Interdependence of Production

The relationship where each type of production depends on the others to function. Primary production provides raw materials for secondary production, which creates goods used by tertiary production to provide services.

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Complex Division of Labor

A worker focuses on a specific task in a larger production process, like writing or editing for a publishing company.

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Regional Division of Labor

One person or group specializes in making a particular product or doing a specific stage of production, like Korea making electronics.

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Simple Division of Labor

A worker focuses on creating a specific product, like a teacher teaching or a chef cooking.

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Practice Makes Perfect

Division of labor helps increase output because workers become better at their tasks through practice.

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Saving Time

Specializing in a job means less time wasted switching between tasks, leading to more production.

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Primary Sector

The sector that includes activities related to the extraction of raw materials from nature, like farming and fishing.

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Secondary Sector

The sector that involves the processing of raw materials into finished goods, like manufacturing and construction.

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Tertiary Sector

The sector that provides services to individuals and businesses, including finance, tourism, and healthcare.

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Decline of the Primary Sector in Hong Kong

The decrease in the contribution of the primary sector to Hong Kong's GDP, largely because of limited natural resources and urbanization.

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Decline of the Secondary Sector in Hong Kong

The decline in the contribution of the secondary sector to Hong Kong's GDP, mainly due to factories moving to mainland China for cheaper production.

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Growth of the Tertiary Sector in Hong Kong

The significant increase in the contribution of the tertiary sector to Hong Kong's GDP, fueled by the growing demand for services in an urbanized society.

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Why does dividing labor increase mechanization?

When a production process is broken down into smaller, more specialized tasks, it becomes easier to design machines to perform those tasks.

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How does division of labor improve labor productivity?

Workers who specialize in one task develop a high level of expertise in that area, leading to increased productivity.

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What is the benefit of training workers in specialized tasks?

Since workers focus on a single task, they only need training for that specific skill, which saves time and resources.

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What is a potential disadvantage of division of labor?

When workers perform repetitive tasks, their jobs can become monotonous and boring, leading to reduced job satisfaction.

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Why does division of labor increase interdependence?

As workers specialize in a single task, they become highly dependent on other workers who perform other stages of the production process.

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Difficulty of Division of Labor: Unique Products

Products with high levels of originality and uniqueness are difficult to divide into smaller tasks. This makes it tough to implement specialized labor and benefit from its advantages.

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Division of Labor: Small Markets

When the market for a product is small, the demand can be met with a limited amount of production. In this case, there is less need to divide labor to increase efficiency.

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Labor Specialization in Restaurants

The phenomenon of different workers in restaurants (cooks, waiters, managers, receptionists) each performing specialized tasks demonstrates how splitting a job into smaller roles can increase productivity.

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Benefits of Division of Labor

Division of labor can increase labor productivity by allowing workers to focus on specific tasks, develop expertise, and improve efficiency through practice and repetition.

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