QB - Ch04 (Eng) - Output (Final)

Economics Inquiry for HKDSE – Microeconomics 1
Chapter 4 Production and Division of Labour
Multiple Choice Questions
|!|EM14001|!|
Which of the following are classified as “production” in economics?
(1) A girl made a dress for herself.
(2) A domestic helper cooked a dish for her master.
(3) A worker worked in a factory without being paid.
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
Production is the process of turning inputs, or factors of production, into output. All of the above
involve turning inputs (e.g. cloth, steamer, raw materials, etc) into output (the dress, the dish, the
product). Therefore, they are classified as production. For (3), even the worker was not paid, as long as
he or she turned the inputs into output, what he or she did was regarded as production.
##
|!|EM14002|!|
Which of the following about production is INCORRECT?
A. Production is the process of turning inputs, or factors of production, into output.
B. The output of production includes physical goods only.
C. Production does not necessarily generate income.
D. A football match between Liverpool and Arsenal is a kind of production.
##
The output of production includes both physical goods and services.
##
© Aristo Educational Press Ltd. 4-1

|!|EM14003|!|
Which of the following can be regarded as “production”?
A. playing computer games
B. jogging in a sports ground
C. writing a website
D. having dinner
##
The process of turning inputs (human efforts) into output (the website) is involved.
##
|!|EM14004|!|
Which of the following can be classified as “production” in economics?
(1) Some players of the NBA take part in a basketball match.
(2) A teacher marks her students’ homework.
(3) A student plays computer games at home.
A. (1) only
B. (3) only
C. (1) and (2) only
D. (2) and (3) only
##
A student playing computer games is a kind of consumption but not production.
##
|!|EM14005|!|
Production
A. only takes place in developed countries.
B. only has two types.
C. turns inputs into physical goods only.
D. may not generate monetary returns.

##
For example, voluntary social services are also regarded as production.
##
|!|EM14006|!|
Voluntary social service is a kind of production because
A. it turns human effort into services.
B. some people donate money to support the services.
C. more than one worker participates in the event.
D. of none of the above.
##
By providing voluntary social services, a process of turning input (human effort) into output (voluntary
social service) is involved.
##
|!|EM14007|!|
Which of the following can be regarded as “production”?
(1) Mr. Lee makes a birthday cake for his son.
(2) Angela makes a doll for her daughter.
(3) Flora cooks noodles for herself.
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
Production is the process of turning inputs, or factors of production, into output. In the above cases,
inputs (e.g. flour) are turned into output (e.g. a cake). Therefore, they can be regarded as production.
##

|!|EM14008|!|
Mary is asked to work overtime without pay. Her work
A. is not production because she does not receive any monetary returns.
B. is not production because this is not what she is willing to do.
C. is production because she turns human effort into output.
D. is production because she works beyond office hours.
##
Production is the process of turning inputs, or factors of production, into output. It does not necessarily
generate monetary returns.
##
|!|EM14009|!|
Selling pirated handbags is
A. a kind of production because it can generate monetary returns.
B. a kind of production because it is a kind of service.
C. not a kind of production because it is illegal.
D. not a kind of production because it may not have a fixed location to operate.
##
Production can take place anywhere. It does not necessarily generate monetary returns. Even an activity
is illegal, as long as it turns inputs into output, it is also regarded as production.
##

|!|EM14010|!|
Goods can be classified into
(1) producer goods and consumer goods.
(2) private goods and public goods.
(3) economic goods and neutral goods.
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
##
|!|EM14011|!|
Films shown in cinemas can be classified as
(1) economic goods.
(2) producer goods.
(3) consumer goods.
(4) private goods.
A. (1) and (2) only
B. (2) and (3) only
C. (3) and (4) only
D. (1), (2) and (4) only
##
People prefer more films as the quantity available is not sufficient to satisfy all human wants. Films are
therefore economic goods.
Films shown in the cinema are goods used to provide services. They are therefore producer goods.
Note that cinemas are private goods but the films shown are public goods.
##

|!|EM14012|!|
Washing machines used in a laundry are
A. producer goods because they are used in the production process to provide other services.
B. producer goods because they are not used at home.
C. consumer goods because they can directly satisfy human wants.
D. consumer goods because they are used for direct consumption.
##
Washing machines in a laundry are used to provide other services. They are therefore producer goods.
##
|!|EM14013|!|
Capital goods
A. are goods used in production process to produce other goods and services.
B. can directly satisfy human wants.
C. are used for direct consumption.
D. refer to all man-made resources used in production.
##
Capital goods are goods used in production process to produce other goods and services. They cannot
satisfy human wants directly and are not used for direct consumption.
##

|!|EM14014|!|
Free Wi-Fi service provided to customers at a coffee shop can be classified as a
(1) producer good.
(2) consumer good.
(3) economic good.
A. (1) only
B. (2) only
C. (1) and (3) only
D. (2) and (3) only
##
The coffee shop provides a free Wi-Fi service in order to improve its service to its customers. It is used
in the production process to produce other services and is a producer good. It is also an economic good
because more of it is preferred.
##
|!|EM14015|!|
Which of the following statements about consumer goods is INCORRECT?
A. Consumer goods are goods used for final consumption.
B. Computers at the MTR stations are consumer goods because they can directly satisfy human
wants.
C. DVD player used at home is a consumer good but the one used in a restaurant is not.
D. Consumer goods directly satisfy human wants.
##
Computers at the MTR stations are producer goods because they are installed by the MTR Corporation
to provide other services in the production process. They do not directly satisfy human wants.
##

|!|EM14016|!|
Which of the following is/are classified as producer goods?
(1) machines in factories
(2) a student’s game console
(3) television sets installed in shopping centres
A. (2) only
B. (1) and (2) only
C. (1) and (3) only
D. (1), (2) and (3)
##
Machines in factories and television sets installed in shopping centre are used in production processes
to produce other goods or services. They are producer goods.
The student’s game console is a consumer good as it directly satisfies human wants.
##
|!|EM14017|!|
Computers used at office can be classified as
(1) economic goods.
(2) consumer goods.
(3) capital goods.
A. (1) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
More computers at office are often preferred, so they are economic goods. Computers at office are used
for producing other goods and services, so they are capital goods.
##

|!|EM14018|!|
Goods can be classified into private goods and public goods. The classification depends on
A. whether the goods are privately owned or not.
B. whether the owner has the private property rights over it or not.
C. whether the consumption of the goods is concurrent in nature or not.
D. none of the above.
##
##
|!|EM14019|!|
A cup of coffee you own is ____________ because ____________.
A. a private good ... when you consume it, the amount available to others reduces
B. a public good ... amount of coffee available to others will not decrease when you drink your
coffee
C. a private good ... you possess a full set of private property rights over your coffee
D. a public good ... you can share your coffee with friends
##
A private good is not concurrent in nature. It is not possible for many people to consume it
simultaneously without reducing its quantity or quality.
##

|!|EM14020|!|
Which of the following statements is/are CORRECT?
(1) Free riders of public goods benefit from consuming public goods without paying for them.
(2) When highways charge users for using them, they are regarded as impure public goods.
(3) Free riders of public goods may not be charged by the providers of public goods.
A. (1) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
As public goods are not excludable, it is difficult to prevent free riders who benefit from the goods
without paying them. Providers of public goods may not charge free riders because it can be costly to
charge them.
(2) is wrong because the highways become private goods when they charges users.
##
|!|EM14021|!|
Public goods are goods
A. which are concurrent in nature.
B. that are characterised as neither excludable nor rival.
C. that can be served to an extra consumer at zero additional cost.
D. All of the above are correct.
##
Public goods are goods which are concurrent in nature. They are characterised as neither excludable
nor rival. Once they are produced, the additional cost of serving them to an extra consumer is zero.
##

|!|EM14022|!|
Which of the following comes closest to being a public good?
A. a public beach at Stanley
B. public radio broadcasting
C. books in a public library
D. a public telephone in the street
##
Public radio broadcasting is neither excludable nor rival. It allows a large audience to consume at the
same time without reducing the amount available to others.
##
|!|EM14023|!|
Which of the following statements about impure public goods is INCORRECT?
A. Impure public goods are concurrent in nature.
B. An impure public good cannot be consumed by many people simultaneously.
C. When there are more consumers, the benefits enjoyed by other individuals from using the
good may be reduced.
D. A congested highway is an example of impure public goods.
##
Impure public goods can be consumed by many people simultaneously. Nevertheless, when there are
more consumers, the benefits enjoyed by other individuals may be reduced.
##
|!|EM14024|!|
A park is an impure public good because
A. it is concurrent in nature while it is not excludable.
B. it is not excludable and it is not concurrent in nature.
C. it is concurrent in nature and the benefits enjoyed by other visitors may be reduced when it is
occupied by a lot of people.
D. some parks may charge entrance fee.

##
When a park is occupied by a lot of people, an extra visitor will make the park even more crowded. The
benefits enjoyed by other visitors may be reduced.
##
|!|EM14025|!|
Which of the following are the characteristics of private goods?
(1) Private goods are not concurrent in nature.
(2) The additional cost of serving a private good to an extra consumer is zero.
(3) Amount available to others decreases if someone consumes the private good.
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
##
|!|EM14026|!|
Which of the following about a public good is/are CORRECT?
A. Consumption of a public good by one person does not reduce its amount available to others.
B. Providers of public goods may not charge free riders because it can be costly to charge them.
C. The cost of serving it to an extra consumer is zero.
##
##

|!|EM14027|!|
A beach
A. is a private good only when it is privately owned.
B. is a private good if no one is using.
C. is a public good because it is non-rival in nature.
D. is an impure public good because it is concurrent and may be rival in nature.
##
A beach is an impure public good. Many people can use a beach simultaneously, so it is concurrent in
nature. However, the benefits enjoyed by other swimmers may be reduced when there are more people.
##
|!|EM14028|!|
Which of the following statements about pure public goods is CORRECT?
A. A congested highway is an example of pure public good.
B. Pure public goods may not be concurrent in nature.
C. Pure public goods are equally available to all individuals.
D. None of the above is correct.
##
A congested highway is an example of impure public good. When a highway is congested, it becomes
rival. Therefore, option A is wrong.
Pure public goods must be concurrent in nature. Therefore, option B is wrong.
##

|!|EM14029|!|
Which of the following is/are NOT private goods?
(1) machines
(2) national defence
(3) food
A. (1) only
B. (2) only
C. (1) and (3) only
D. (2) and (3) only
##
National defence is a public good. The amount available will not be reduced if someone consumes it.
##
|!|EM14030|!|
Which of the following are the characteristics of public goods?
(1) non-rival
(2) concurrent
(3) non-excludable
(4) free-of-charge
A. (1) and (3) only
B. (1), (2) and (3) only
C. (2), (3) and (4) only
D. (1), (2), (3) and (4)
##
Providers of public goods may charge consumers. Therefore, public goods are not necessarily free-of-
charge although many of them are.
##

|!|EM14031|!|
Firework displays are a public good because
A. it is difficult to prevent someone from enjoying the show.
B. they are equally available to all individuals and of the same quality.
C. people do not need to pay for it.
##
A public good is concurrent in nature. Many people can consume it simultaneously, but its quantity or
quality is not reduced.
##
|!|EM14032|!|
Which of the following is most likely a public good?
A. free samples given out in the streets
B. public swimming pool
C. sports facilities in parks
D. Mozart’s music performed in the Victoria Park
##
Of the above four options, only Mozart’s music performed in the Victoria Park is concurrent in nature.
It is neither excludable nor rival.
##
|!|EM14033|!|
Which of the following about public goods is INCORRECT?
A. Public goods are concurrent in nature.
B. No one is willing to pay for public goods.
C. Additional cost of providing the goods to an extra consumer is zero.
D. It can be costly to charge free riders of public goods.

##
Providers of public goods may not charge the free riders because it can be costly to charge them. Some
free-riders are actually willing to pay for the goods, but they are not recognised and thus do not need to
do so.
##
|!|EM14034|!|
Lebron James is a famous basketball player and he often participates in basketball matches. In
economics, he engages in ____________ production.
A. primary
B. secondary
C. tertiary
D. secondary and tertiary
##
Basketball match is a kind of entertainment, which is a service provided to consumers. As tertiary
production concerns with the provision of services, Lebron James engages in tertiary production.
##
|!|EM14035|!|
Which of the following statements about secondary production is/are INCORRECT?
A. It is the process of turning raw materials into semi-finished or finished goods.
B. Manufacturing of clothes is an example of secondary production.
C. Building the International Commerce Centre is not an example of secondary production.
D. All of the above are incorrect.
##
Both manufacturing and construction are examples of secondary production.
##

|!|EM14036|!|
Which of the following statements about primary production is/are INCORRECT?
A. Primary production refers to those activities that extract raw materials from nature.
B. It only occurs in developing countries.
C. Quarrying is an example of primary production.
D. All of the above are incorrect.
##
Primary production exists in both developing and developed countries.
##
|!|EM14037|!|
Which of the following statements about tertiary production is/are CORRECT?
A. Tertiary production refers to the provision of different kinds of services.
B. Primary production, secondary production and tertiary production are interdependent.
C. Medical service is an example of tertiary production.
##
##
|!|EM14038|!|
Which of the following are tertiary producers?
(1) pharmacist
(2) construction worker
(3) financial planner
(4) bus driver
A. (1) and (2) only
B. (3) and (4) only
C. (1), (3) and (4) only
D. (1), (2), (3) and (4)

##
Pharmacist, financial planner and bus driver provide services to people, so they are tertiary producers.
Construction worker is a secondary producer.
##
|!|EM14039|!|
Amy is an accountant of an accounting firm. She is involved in ____________.
(1) primary production
(2) secondary production
(3) tertiary production
A. (2) only
B. (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
As an accountant in an accounting firm, she provides accounting services to customers. She is involved
in tertiary production.
##
|!|EM14040|!|
Which of the following does NOT belong to secondary production?
A. garment-manufacturing industry
B. mining industry
C. construction industry
D. supply of electricity
##
The mining industry belongs to primary production.
##

|!|EM14041|!|
Which of the following is NOT a primary producer?
A. a worker working in a garment factory
B. a worker working in a quarry
C. a farmer
D. a fisherman
##
A worker working in a garment factory is a secondary producer.
##
|!|EM14042|!|
Dennis is a worker in a garment factory during the daytime. In the evening, he works as a salesperson
in a shop. Dennis is a ____________ producer.
(1) primary
(2) secondary
(3) tertiary
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
Dennis is a secondary producer as he is a worker in a garment factory. He is also a tertiary producer as
he is a salesperson in a shop.
##

|!|EM14043|!|
Miss Fong is the owner of a bakery. She is responsible for making decisions and coordinating other
factors of production and she does not need to bake the bread and cakes, as they are supplied by other
suppliers. Sam is employed as a shopkeeper in her shop. Miss Fong is a ____________ producer and
Sam is a ____________ producer.
A. secondary ... tertiary
B. secondary ... secondary
C. tertiary ... tertiary
D. tertiary ... secondary
##
Both of them provide services to customers. Therefore, they are tertiary producers.
##
|!|EM14044|!|
Catering service in hotel belongs to
A. secondary production.
B. tertiary production.
C. both primary and tertiary production.
D. both secondary and tertiary production.
##
##
|!|EM14045|!|
Primary production provides ____________ for tertiary production. Tertiary production provides
____________ for primary production in return.
A. producer goods ... services
B. raw materials ... services
C. producer goods ... raw materials
D. raw materials ... producer goods

##
##
|!|EM14046|!|
Secondary production provides _________ for other types of production. Other types of production
provide _________ in return.
A. producer goods ... raw materials or services
B. producer goods ... services
C. raw materials ... producer goods or services
D. services ... raw materials or producer goods
##
##
|!|EM14047|!|
Look at the following diagram.
factors of production producer goods
Q R
consumer goods
P, Q and R represent ____________, ____________ and ____________ respectively.
A. primary production … secondary production … tertiary production
B. firm … household … tertiary production
C. secondary production … household … secondary production
D. secondary production … primary production … firm

##
P provides producer goods to R, so P represents secondary production. R provides consumer goods to
Q, so R also represents secondary production but not tertiary production. Q provides factors of
production to P while it gets consumer goods from R, so Q represents household.
##
|!|EM14048|!|
Read the following table.
% of working population
Country X Country Y
Primary production 6 14
Secondary production 27 39
Tertiary production 67 47
Referring to the table, which of the following statements is/are CORRECT?
A. People in Country X have a higher living standard than people in Country Y.
B. The number of tertiary producers in Country X is larger than that of Country Y.
C. More people engage in tertiary production in both countries than other types of production.
##
Living standard cannot be reflected by the above statistics. Besides, we do not know the population in
each country so we do not know which country has more people engaged in tertiary production based
on the information given.
##

|!|EM14049|!|
Read the following table.
Working population (million)
Country X Country Y
Primary production 25 6
Secondary production 20 77
Tertiary production 34 60
From the above table, we can conclude that
A. the percentage of working population employed in the tertiary sector in Country X is higher
than that in Country Y.
B. Country X is a developed country.
C. Country Y is a developing country.
D. None of the above.
##
Percentage of working population employed in the tertiary sector in Country X = (34 / 79)  100%
 43%
Percentage of working population employed in the tertiary sector in Country Y = (60 / 143)  100%
 42% < 43%
Besides, the above statistic cannot tell us whether the countries are developed or developing countries.
##
|!|EM14050|!|
Suppose tertiary sector is the largest sector in Country A in terms of GDP contribution. Which of the
following is CORRECT?
A. The number of people engaged in the tertiary sector must be larger that those engaged in the
primary and secondary sectors.
B. The tertiary sector in Country A is expanding.
C. Country A is a developed country.

##
Although the tertiary sector has the greatest GDP contribution in Country A, it does not mean that more
people engage in tertiary production. It also does not imply that the tertiary sector is expanding or
anything that is related to its development status.
##
|!|EM14051|!|
Suppose primary production is not significant in Country B. Which of the following may be a possible
reason?
A. Country B lacks natural resources.
B. Country B is highly urbanised.
C. Country B is a small country.
D. Country B’s population size is small.
##
There is no direct relationship between the importance of primary production and its development
status / size of the country / size of population.
##
|!|EM14052|!|
Over the last decade, the relative importance of secondary production in terms of GDP contribution in
Country S has decreased. Which of the following is CORRECT?
A. Compared with 10 years ago, the primary sector in Country S has expanded.
B. Compared with 10 years ago, secondary production has become less significant than primary
and tertiary production, in terms of GDP contribution.
C. Compared with 10 years ago, secondary production’s GDP contribution in Country S must
have decreased.
##

##
|!|EM14053|!|
Which of the following statements is CORRECT?
A. China is a developed country because the contribution of tertiary production to GDP is
higher than that of other types of production.
B. There is no primary production in Hong Kong.
C. There is only primary production in developing countries.
##
There is no direct relationship between the importance of each type of production and the development
status of the region.
##
|!|EM14054|!|
Which of the following statements about division of labour is INCORRECT?
A. It can be classified into simple division of labour, complex division of labour and regional
division of labour.
B. It saves time in training labour.
C. It increases the occupational mobility of labour.
D. One of the results of practising division of labour is that consumers have fewer varieties of
products to choose from.
##
Since workers are trained to have one set of skills only, they will have a lower occupational mobility.
##
|!|EM14055|!|
Under division of labour, there is a greater degree of interdependence among production stages because
A. there is a closer relationship among workers.
B. machines are fully utilised.

C. the whole production process is divided into many highly correlated stages.
D. of none of the above.
##
Under specialisation, the whole production process is divided into many highly correlated stages. If a
problem occurs in one stage, the production of latter stages will be affected.
##
|!|EM14056|!|
Which of the following about division of labour are CORRECT?
(1) It is a production system in which workers specialise in producing a good or in a stage of
production of a good.
(2) It can be practised in primary production.
(3) It can increase labour productivity and reduce average cost of production.
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
##
|!|EM14057|!|
Practising division of labour can
A. increase labour productivity in producing toys.
B. improve people’s living standard.
C. be undesirable when the product is a painting.
##
##

|!|EM14058|!|
Which of the following is NOT an example of simple division of labour?
A. A veterinarian (獸醫) cures a cat.
B. A minibus driver drives a minibus.
C. A worker packs the toys produced in a toy factory.
##
It is an example of complex division of labour instead of simple division of labour.
##
|!|EM14059|!|
Which of the following statements about simple division of labour is CORRECT?
A. It implies that a worker specialises in a particular stage of the production of a good.
B. Nurse and bus driver are examples of simple division of labour.
C. It is the most efficient type of division of labour.
D. It exists in developing countries only.
##
Simple division of labour implies a worker specialises in producing a particular good. Nurse and bus
driver specialise in providing medical service and transportation service respectively.
##

|!|EM14060|!|
Complex division of labour
(1) can only be found in large firms.
(2) implies workers in different stages of production are dependent on each other.
(3) can be practised in a restaurant.
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)
##
For (2), complex division of labour implies that workers in different stages of production are dependent
on each other. They follow a production sequence.
For (3), in a restaurant, there are cooks, waiters and cashiers. They perform different stages of the
production process.
##
|!|EM14061|!|
Which of the following statements about regional division of labour is/are CORRECT?
A. It implies that a district or region specialises in producing a particular good.
B. It can increase labour productivity.
C. Production of mangoes in the Philippines and production of rice in Thailand are examples of
regional division of labour.
##
##

|!|EM14062|!|
In a modern society, people specialise in producing something and exchange their output for other
goods and services. Which of the following is/are the possible reason(s) of this practice?
A. It makes full use of capital.
B. It increases labour productivity and enables mass production.
C. It saves training time.
D. All of the above.
##
Practising specialisation increases labour productivity and enables mass production. Capital can be
fully utilised. Training time is also saved.
##
|!|EM14063|!|
When we produce a film, we need actors, a director, a cinematographer and so on. Producing a film is
an example of ______________.
A. simple division of labour
B. complex division of labour
C. regional division of labour
D. departmental division of labour
##
The actors, the director and the cinematographer are responsible for different stages of film production.
Therefore, it is an example of complex division of labour.
##
|!|EM14064|!|
Which of the following activities is the least suitable for practising division of labour?
A. writing a novel
B. driving a bus

C. preparing a dinner
D. making a cake
##
##
|!|EM14065|!|
Division of labour can improve people’s living standard because
A. a larger variety of goods and services can be produced for people to choose from.
B. a larger volume of goods and services can be produced at lower average costs.
C. workers become more interdependent.
D. there will be fewer hand-made products.
##
Division of labour can increase labour productivity and enables mass production. The volume of goods
and services produced will increase.
##
|!|EM14066|!|
Which of the following is NOT a disadvantage of division of labour?
A. The work becomes monotonous.
B. The products tend to be standardised.
C. The work tends to be mechanised.
D. The degree of interdependence is higher.
##
##
|!|EM14067|!|
After practising division of labour,
A. labour productivity is enhanced.
B. workers enjoy their job more.

C. workers become all-rounded.
D. people’s living standards improve as they enjoy a wider range of goods and services.
##
Division of labour increases labour productivity. The same amount of labour produces more output or
producing the same amount of output needs less labour.
##
|!|EM14068|!|
Which of the following about division of labour is/are CORRECT?
A. The producer can choose the best people to do the job.
B. Workers only need to develop particular technical skills.
C. Workers gain experience by repeating the task.
D. All of the above is correct.
##
##
|!|EM14069|!|
Which of the following statements about division of labour are INCORRECT?
(1) It can save training time because workers only need to develop specific skills.
(2) It can save training time because only those workers with the highest productivities are
chosen.
(3) It can save production time because workers do not need to move around different tasks.
(4) It can save production time because different production stages are located at one place.
A. (1) and (3) only
B. (1) and (4) only
C. (2) and (3) only
D. (2) and (4) only

##
Under division of labour, people will be chosen to do the jobs that are most suitable for them. They do
not need to be the workers with the highest productivities.
Division of labour does not require production stages to be located at one place.
##
|!|EM14070|!|
Which of the following is an advantage of division of labour?
A. Workers can have a wider range of jobs to choose from.
B. Training time can be minimised.
C. Workers have greater job satisfaction.
D. Workers can produce a wider range of goods and services.
##
Division of labour enables workers to concentrate on doing one task. Since workers only need some
specific skills instead of many sets of skills, training time can be saved.
##
|!|EM14071|!|
In a restaurant, there are waiters, chefs and cashiers. Which of the following are the possible reasons
for the above arrangement?
(1) It can minimise the training cost.
(2) Amount of tools can be saved.
(3) Practice makes perfect.
A. (1) and (2) only
B. (1) and (3) only
C. (2) and (3) only
D. (1), (2) and (3)

##
The restaurant is practising division of labour. All of the above are the advantages of division of labour.
##
|!|EM14072|!|
Which of the following is/are the side-effect(s) of division of labour?
A. Workers suffer a greater risk of unemployment.
B. The whole production process will slow down if a problem occurs in one stage of
production.
C. The market of hand-made products will diminish.
##
##
|!|EM14073|!|
Which of the following is a disadvantage of division of labour?
A. To the workers, work becomes dull and monotonous.
B. Workers have lower geographical mobility.
C. A smaller volume of goods and services are produced.
##
Under division of labour, workers have to do the same task repeatedly. The job will become dull and
monotonous.
##

|!|EM14074|!|
Workers under division of labour suffer from a higher risk of unemployment because
A. they are only trained for the skills required for a particular job.
B. they depend totally on machinery.
C. they are affected by workers in different stages of production.
##
Workers are only trained to acquire the skills required for their job. Their risk of unemployment is
greater if the demand for their skills falls.
##
|!|EM14075|!|
To practise division of labour, it is better to have
A. all-rounded training for the workers.
B. labour of higher quality.
C. a large market size.
D. a large plant.
##
When the market is small, a small amount of output is sufficient to satisfy the market demand. Division
of labour may not be necessary. It is better to practise division of labour in a large market.
##
|!|EM14076|!|
Which of the following about division of labour is/are CORRECT?
A. It is less feasible if the final product’s originality and uniqueness is highly valued.
B. Size of the market is one of the concerns in practising division of labour.
C. It is difficult for division of labour to be prastised in novel writing.

##
##

Short Questions
|!|ES14001|!|
(a) Define production. (2 marks)
(b) “My mother cooks for me everyday. It is a kind of production.” Do you agree? Explain. (3 marks)
##
(a) Production is the process of turning inputs, or factors of production, into output. (2 marks)
(b) Yes. (1 mark)
Cooking is a process that turns foodstuff, which is a kind of inputs, into dishes, which is a kind of
output, so it is a kind of production. (2 marks)
##
|!|ES14002|!|
“Astronauts carry out experiments when they are in space. Those experiments are production.”
Comment on the above statement. (3 marks)
##
The statement is correct. (1 mark)
Conducting experiments involves turning inputs (materials and effort used in the experiments) into
output (result of the experiments). Therefore, the experiments carried out in space are a kind of
production. (2 marks)
##
|!|ES14003|!|
(a) Betty always asks her assistant to handle her personal affairs outside office hours without pay. Is
this an example of production? Explain. (3 marks)
(b) Betty sometimes surfs the Internet in the office. Under what circumstance can her action be
regarded as production? Give ONE example to illustrate your answer. (3 marks)

##
(a) This is an example of production. (1 mark)
Production does not necessarily generate monetary returns. As Betty’s assistant turns an input
(labour) into output (her service to Betty), it is a kind of production. (2 marks)
(b) Production is the process of turning inputs, or factors of production, into output. Her action can be
regarded as production when inputs are turned into output. For example, when she surfs the
Internet to find some information that is related to work, she turns an input (labour) into output
(the information found). This can then be regarded as production. (3 marks)
##
|!|ES14004|!|
Under what circumstance is a television set a producer good? Under what circumstance is a television
set a consumer good? Explain. (4 marks)
##
A television set displayed in an electrical appliance shop is used to provide services to customers. In
this case, it is a producer good. (2 marks)
A television set used at home can directly satisfy human wants for entertainment. In this case, it is a
consumer good. (2 marks)
##
|!|ES14005|!|
(a) Define capital goods and consumer goods. (4 marks)
(b) Give and explain ONE example of capital goods. (2 marks)
##
(a) Producer goods are goods used in production process to produce other goods and services. They
cannot satisfy human wants directly. (2 marks)
Consumer goods are goods used for final consumption. They can satisfy human wants directly.
(2 marks)
(b) Machines used in factories are examples of capital goods. They are used to produce other goods
and services, but they are not used for direct consumption. (2 marks)
##

|!|ES14006|!|
“An air-conditioner must be a consumer good.” Do you agree? Explain. (3 marks)
##
I do not agree. (1 mark)
To determine whether a good is a consumer good or a producer goods depends on how the good is
used. If the air-conditioner is used to provide other services, it is a producer good. If the air-conditioner
is used for direct consumption/satisfying wants directly, it is a consumer good. (2 marks)
##
|!|ES14007|!|
(a) What are public goods? (3 marks)
(b) Give ONE example of a good that is a public good and a producer good. Explain your choice.
(3 marks)
##
(a) Public goods are goods which are concurrent in nature. They are characterised as neither
excludable nor rival. (3 marks)
(b) A lighthouse is an example of a public good and producer good. (1 mark)
It is a public good because it is neither excludable nor rival. Consumption of the service provided
by a lighthouse by one person does not reduce the amount available to others. (1 mark)
It is a producer good because it is used to provide the service of guiding ships. (1 mark)
(or any reasonable answers) (3 marks)
##
|!|ES14008|!|
(a) Define private goods. (3 marks)
(b) Give ONE example of a good that is a private good and a consumer good. Explain your choice.
(3 marks)

##
(a) Private goods are not concurrent in nature. They are characterised as both excludable and rival.
(3 marks)
(b) An orange is an example of a private good and consumer good. (1 mark)
It is a private good because it is excludable and rival. It is possible to prevent others from eating
your orange and fewer oranges will be available to others when a person has eaten an orange.
(1 mark)
It is a consumer good because it directly satisfies human wants. (1 mark)
##
|!|ES14009|!|
(a) What are free riders of public goods? (2 marks)
(b) Free riders are often not charged for using public goods. Explain this phenomenon. (2 marks)
##
(a) Free riders of public goods are those people who benefit from public goods without paying for
them. (2 marks)
(b) As public goods are not excludable, it is difficult to recognise and prevent free riders from
consuming the good. Providers of public goods may not charge free riders because it can be costly
to charge them. (2 marks)
##
|!|ES14010|!|
(a) Do you think the Island Eastern Corridor (東區走廊) is a pure public good? Explain. (3 marks)
(b) Do you think the seats in a students’ study room of a public library are pure public goods?
Explain.
(3 marks)

##
(a) No. (1 mark)
The Island Eastern Corridor is concurrent in nature. It is non-excludable. When the highway
becomes congested, it will become rival. Each extra vehicle makes the road even more congested.
The convenience enjoyed by highway users will fall. Therefore, it is an impure public good.
(2 marks)
(b) No. (1 mark)
The seats in the students’ study room are excludable because it is possible to prevent others from
using them. Also, they are rival because fewer seats will be available to others when some seats
are occupied. Therefore, the seats in the students’ study room are private goods. (2 marks)
##
|!|ES14011|!|
To promote the Beijing 2008 Olympic Games, the Leisure and Cultural Services Department (LCSD)
launched the Free Admission Scheme of LCSD Leisure Facilities from 1 July to 30 September 2008.
Some leisure facilities were open for free use by individual members of the public. During that period,
there were long queues in front of some swimming pools.
(a) Were the free facilities free goods? Explain. (3 marks)
(b) Were the free facilities public goods? Explain. (3 marks)
##
(a) No. (1 mark)
Free goods refer to those goods that people do not prefer more of as the quantity available is
sufficient to satisfy all human wants. (1 mark)
As more of the free facilities were preferred to less, the facilities are economic goods but not free
goods. (1 mark)
(b) No. (1 mark)
Public goods are goods which are concurrent in nature. They are characterised as neither
excludable nor rival. (1 mark)
Those free facilities were excludable and rival. It was possible to prevent others from using them
and fewer of them would be available when some of them were used. Therefore, the facilities
were private goods. (1 mark)
##

|!|ES14012|!|
(a) Name the THREE types of production. (3 marks)
(b) Give ONE example for each type of production. (3 marks)
##
(a) The three types of production are primary production, secondary production and tertiary
(b) Agriculture, construction and financial services are examples of primary production, secondary
production and tertiary production respectively. (3 marks)
##
|!|ES14013|!|
Joe is a farmer. His wife, Anna, sells the agricultural products of Joe’s farm in a local market.
(a) Is Joe a primary producer, secondary producer or tertiary producer? Explain. (2 marks)
(b) Is Anna a primary producer, secondary producer or tertiary producer? Explain. (2 marks)
##
(a) Joe is a primary producer. (1 mark)
He extracts raw materials from nature, so he engages in primary production. (1 mark)
(b) Anna is a tertiary producer. (1 mark)
She provides services to customers, so she engages in tertiary production. (1 mark)
##
|!|ES14014|!|
Suggest TWO possible reasons why division of labour helps reduce the average cost of production.
(4 marks)

##
Division of labour requires workers to do one task only. Hence, they are trained to acquire one set of
skills instead of many sets. This can save training time. (2 marks)
Under division of labour, different stages of production are operated at the same time. It can therefore
make full use of capital. This helps reduce the average cost of production. (2 marks)
(or any reasonable answers with explanation) (2 marks each)
##
|!|ES14015|!|
Identify the type of division of labour involved in each of the cases below.
(a) textile production in China (1 mark)
(b) a salesperson in a department store selling electronic products to customers (1 mark)
(c) a fisherman catching fish in the sea (1 mark)
##
(a) regional division of labour (1 mark)
(b) complex division of labour (1 mark)
(c) simple division of labour (1 mark)
##
|!|ES14016|!|
There are three workers in a cafe. One is responsible for preparing the drinks. One is responsible for
serving the customers and one is the cashier.
(a) What economic principle is illustrated in the above description? (1 mark)
(b) List TWO possible advantages for such arrangement. (4 marks)

##
(a) Complex division of labour is illustrated. (1 mark)
(b) - When the best people are chosen to do the job, goods will be produced more efficiently. It can
increase labour productivity and output.
- When workers do the same job repeatedly, they can develop technical skills, acquire knowledge
and gain experience in performing the particular job. Workers can then do their jobs more
efficiently. This can increase labour productivity.
- Since workers are trained to acquire one set of skills instead of many sets, this can save training
time. It can also save time spent on moving around different tasks. The time needed to change
tools and job locations can be reduced, thus increasing labour productivity.
- As the production process is split into different tasks, special machines can be designed to do the
tasks. This can increase labour productivity and enables mass production to take place.
- Under division of labour, different stages of production are operated at the same time. It can
therefore make full use of capital. This helps to reduce the average cost of production.
(Mark the FIRST TWO points only, 2 marks each)
##
|!|ES14017|!|
John has worked in a factory for 20 years. He was laid off a year ago and he has not found a job since
then. No factories offers jobs similar to what he did before.
What shortcoming of division of labour does this example illustrate? Suggest TWO other shortcomings
of division of labour. (6 marks)

##
This example illustrates the shortcoming that the risk of unemployment is greater. Since workers need
only one set of skills instead of many sets, their risk of unemployment will be greater if the demand for
their skills falls. (2 marks)
Other shortcomings of division of labour:
- As workers have to do the same task repeatedly, the job will then become dull and monotonous.
Workers may enjoy their work less and they may not perform well.
- Under division of labour, the whole production process is divided into many highly correlated stages.
If a problem occurs in one stage, the production of latter stages will be affected. This will slow down
the whole production process.
- Mechanisation and mass production result in lower average production cost. The price of products
will be cheaper than those of hand-made products. The demand for hand-made products and their
craftsmanship will then decrease. As a result, there will be a loss of craftsmanship.
- Output is often standardised when division of labour is practiced. Thus, consumers will have fewer
varieties of products to choose from.
(Mark the FIRST TWO points only, 2 marks each)
##
|!|ES14018|!|
Under what circumstances is division of labour less feasible? (4 marks)
##
When the originality and uniqueness of products are highly valued, it is difficult to practice division of
labour when producing these products. (2 marks)
When the market is small, a small amount of output is sufficient to satisfy market demand. Thus the
practice of division of labour may not be economical. (2 marks)
##

Long Questions
|!|EL14001|!|
Samantha has opened a grocery store in Mongkok. She employed Amy, Simon and Peter. Amy and
Simon are salespersons. Peter is responsible for deliveries. Samantha works as a cashier.
(a) What type of production does Samantha engage in? (2 marks)
(b) Which type of division of labour does Samantha’s store practise? Explain. (2 marks)
(c) Suggest THREE advantages of division of labour. (6 marks)
(d) Samantha is the only owner of the store and she has to bear all charges incurred by the store.
Name the type of ownership of Samantha’s store. Suggest TWO other features of this type of
ownership. (3 marks)
##
(a) Samantha runs a grocery store which provides services to others. She engages in tertiary
(b) It belongs to complex division of labour. Each person specialises in a particular stage of
(c) - If workers can specialise in producing what they are good at, they will produce the goods more
efficiently. This can increase labour productivity and the output of the grocery store.
- When workers do the same job repeatedly, they can develop technical skills, acquire knowledge
and gain experience in performing a particular task. Workers can then do their jobs more
efficiently. This can increase labour productivity.
- Since workers only need one set of skills instead of many sets, it can save training time. It can
also save the time spent moving around different tasks. The time needed to change tools and job
locations can be reduced, thus increasing labour productivity.
- As the production process can be split into different tasks, machines can be designed to do
routine and simple tasks. This can increase labour productivity and enable mass production.
- Under division of labour, different stages of production can be operated at the same time. It can
therefore make full use of capital. This helps to reduce the average cost of production.
(Mark the FIRST THREE points only, 2 marks each)

(d) It is sole proprietorship. (1 mark)
Other features of a sole proprietorship:
- unlimited liability
- limited continuity
- simple legal set-up procedure
- lower profits tax rate
- Financial information can be kept secret.
- closer relationship with employees and customers
- prompt decision making
(Mark the FIRST TWO points only, 1 mark each)
##
|!|EL14002|!|
Mr. Wong has his own fishing boat. Every morning, he catches fish in the sea. Most of the fish caught
are sold in his seafood restaurant. His family also consumes some of the fish caught.
(a) Are the fish caught by Mr. Wong producer goods? Explain. (5 marks)
(b) Explain what type(s) of production Mr. Wong engages in. (4 marks)
(c) Mr. Wong also employs Daisy as a waitress and David as a cook in the restaurant. Suggest TWO
possible disadvantages of this arrangement from the viewpoint of Mr. Wong. (4 marks)
##
(a) Part of the fish are producer goods and part of them are consumer goods. (1 mark)
Those fish cooked and served in the restaurant are producer goods. They are used to produce other
goods and services. (2 mark)
Those fish consumed by his family are consumer goods. They are used to satisfy human wants
directly. (2 mark)
(b) Mr. Wong engages in primary production as he extracts resources (i.e. the fish) from nature.
(2 marks)
Besides, his restaurant provides services to customers. Therefore, he engages in tertiary
production as well. (2 marks)

(c) As workers need to do the same task repeatedly, the job may become dull and monotonous.
Workers may enjoy their work less and not perform well. (2 marks)
Under division of labour, the whole production process is divided into many highly correlated
stages. If a problem occurs in one stage, the production of latter stages will be affected. This will
slow down the whole production process. (2 marks)
##
|!|EL14003|!|
Country A planned to build new lighthouses along the coast.
(a) Green Construction is responsible for building the lighthouses. What kind of production does it
engage in? (1 mark)
(b) Are the lighthouses producer goods or consumer goods? Explain. (2 marks)
(c) Are the lighthouses public goods or private goods? Explain. (4 marks)
(d) Someone said, “The ships using the service provided by the lighthouses are not charged and they
are free riders.” Comment on the statement. (4 marks)
##
(a) It engages in secondary production. (1 mark)
(b) The lighthouses are producer goods because they are used to provide navigating services for
ships.
(2 marks)
(c) The lighthouses are public goods. (1 mark)
They are concurrent in nature. They are neither excludable nor rival. It is impossible to prevent
others from being guided by the lighthouses. When a ship benefits from this navigating service,
other ships still enjoy the same services at the same level of quality and quantity. (3 marks)
(d) The statement is correct. (1 mark)
Free riders are those who benefit from the goods without paying for them. (1 mark)
Lighthouses are not excludable. It is too costly for the owner of a lighthouse to charge those ships
that benefit from the lighthouse, so the ships are not charged. Therefore, the ships are free riders.
(2 marks)
##

|!|EL14004|!|
Karen is a novel writer. Some of her books can be found in public libraries.
(a) Are the books of public libraries public goods? Explain. (3 marks)
(b) Are public libraries primary producers, secondary producers or tertiary producers? Explain.
(2 marks)
(c) In each book Karen writes, there are pictures drawn by her friend, Kenneth. Which type of
division of labour is practised? Explain. (2 marks)
(d) Suggest THREE disadvantages of practising division of labour. (6 marks)
##
(a) Books in public libraries are private goods. (1 mark)
They are excludable and rival. It is possible to prevent others from reading the books when you
are reading them. There are fewer books available to others when you are reading one. (2 marks)
(b) They are tertiary producers. (1 mark)
They provide services like lending services and reference services to the public. (1 mark)
(c) Complex division of labour is practised. (1 mark)
Karen and Kenneth each specialises in a particular stage of the production of the book. (1 mark)
(d) - As workers have to do the same task repeatedly, the job will then become dull and monotonous.
Workers may enjoy their work less and they may not perform well.
- Since workers need only one set of skills instead of many sets, their risk of unemployment will
be greater if the demand for their skills falls.
- Under division of labour, the whole production process is divided into many highly correlated
stages. If a problem occurs in one stage, the production of latter stages will be affected. This will
slow down the whole production process.
- Mechanisation and mass production result in lower average production cost. The price of
products will be cheaper than those of hand-made products. The demand for hand-made products
and their craftsmanship will then decrease. As a result, there will be a loss of craftsmanship.
- Output is often standardised when division of labour is practised. Thus, consumers will have
fewer varieties of products to choose from.
(Mark the FIRST THREE points only, 2 marks each)
##

QB - Ch04 (Eng) - Output (Final)

Uploaded by

Copyright:

Available Formats

QB - Ch04 (Eng) - Output (Final)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

QB - Ch04 (Eng) - Output (Final)

Uploaded by

Copyright:

Available Formats

Economics Inquiry for HKDSE – Microeconomics 1

Chapter 4 Production and Division of Labour

Multiple Choice Questions

Which of the following are classified as “production” in economics?

(1) A girl made a dress for herself.

(2) A domestic helper cooked a dish for her master.

(3) A worker worked in a factory without being paid.

A. (1) and (2) only

B. (1) and (3) only

C. (2) and (3) only

D. (1), (2) and (3)

Which of the following about production is INCORRECT?

A. Production is the process of turning inputs, or factors of production, into output.

B. The output of production includes physical goods only.

C. Production does not necessarily generate income.

D. A football match between Liverpool and Arsenal is a kind of production.

The output of production includes both physical goods and services.

© Aristo Educational Press Ltd. 4-1

Which of the following can be regarded as “production”?

A. playing computer games

B. jogging in a sports ground

Which of the following can be classified as “production” in economics?

(1) Some players of the NBA take part in a basketball match.

(2) A teacher marks her students’ homework.

(3) A student plays computer games at home.

C. (1) and (2) only

D. (2) and (3) only

A student playing computer games is a kind of consumption but not production.

A. only takes place in developed countries.

B. only has two types.

C. turns inputs into physical goods only.

D. may not generate monetary returns.

© Aristo Educational Press Ltd. 4-2

For example, voluntary social services are also regarded as production.

Voluntary social service is a kind of production because

A. it turns human effort into services.

B. some people donate money to support the services.

C. more than one worker participates in the event.

D. of none of the above.

social service) is involved.

Which of the following can be regarded as “production”?

(1) Mr. Lee makes a birthday cake for his son.

(2) Angela makes a doll for her daughter.

(3) Flora cooks noodles for herself.

A. (1) and (2) only

B. (1) and (3) only

C. (2) and (3) only

D. (1), (2) and (3)

© Aristo Educational Press Ltd. 4-3

Mary is asked to work overtime without pay. Her work

B. is not production because this is not what she is willing to do.

C. is production because she turns human effort into output.

D. is production because she works beyond office hours.

generate monetary returns.

Selling pirated handbags is

A. a kind of production because it can generate monetary returns.

B. a kind of production because it is a kind of service.

C. not a kind of production because it is illegal.

A cup of coffee you own is because .