4 – Production

Name :_______________ Date: ___________

From: Programming / Networking / Multimedia / Electronic Level : _________

PART 1 – OBJECTIVE QUESTIONS (5 marks)

1. A patent is granted for :

A. An invention
B. The process of inventing the product
C. An improvement in the earlier invention
D. All of the above

2. An example of a production overhead would be:

A. Labour costs
B. Rent
C. Supervisory Costs
D. Materials

3. Which of the following is NOT true of home based work?

A. Also termed as telecommuting
B. Doing work linked by telecommunications
C. Only women are involved in home based work
D. Work performed in the employees home

4. When a new textile firm sets up in the North West of England it benefits from the textile
machinery suppliers, textile markets (e.g. cotton exchanges), training courses and other
support services already established in that geographical area. This is an example of:

A. External economies of scale

B. Economies of scope
C. Technical economies of scale
D. Non-technical economies of scale

5. Which of the following is NOT true of a job production?

A. A Job Production has economies of scale

B. Skilled labour is being used
C. It is a one-off order and not likely to be repeated
D. It is usually a high-priced item

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 4 – Production

PART 2 – Short Answer and subjective questions (20 marks)

6. Following a series of takeover, a furniture manufacturer now supplies a national market.

Identify the four economies of scale that might be available to this company. (4 marks)

i) Purchasing Economies ii) Marketing Economies

iii) Managerial Economies iv) Financial Economies

Technological Economies and also Risk-bearing Economies

7. Identify the 3 factors that could influence the choice of a location for a large
supermarket. (3 marks)

i) Availability of utilities ii) Good transport Link

iii) Availability of labour supplies iv) Government support

8. Name the 3 most common production systems. (3 marks)

i) Job Production ii) Batch Production

iii) Cell Production iv) Mass production

9. Explain what is fixed cost and variable cost and give 2 examples of each cost.
(6 marks)

Fixed costs do not change with output level . Example: rent, insurance and salary
Variable costs change with level of output . Example : direct labour and materials

10. Give 2 reasons why small firms can still survive and can compete with large
firms. ( 4 marks)

Small firms can be set up with small capital.

People want to be their own boss,
Personal service provided such as lawyers and consultants
The size of market is limited such as plumber and house repairer.