Micro Topic 4: Production, Costs and Revenue
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11 Terms
Examples of FIxed Costs
Rent
Salaries
Interest on Loans
Advertising
Business Rates
Examples of Variable Costs
Wages
Utility Bills
Raw Material Costs
Transport Costs
Equations of Costs?
Pros of Specialisation
Higher Output (more trade and growth)
Wider Range of Goods and Services
Greater Allocative Efficiency
Higher Productivity Through Better Use of Workers
Quality of Workers
Cons of Specialisation
Finite Resources
Changes in Fashion/Trends
De-Industrialisation
National Interdependence
Pros of Division of Labour
Workers Highly Productive
Specialist Capital for Workers
Lower Prices
Higher Quantity/Choice/Quality for Consumers
Cons of Division of Labour
Wokers Demotivated
Higher Worker Turnover
Risk of Long Term Unemployment
Highly Standardised Goods and Services
Internal Economies of Scale
Risk Bearing
Financial
Managerial
Technical
Marketing
Purchasing
External Economies of Scale
Better Transport Infrastructure
Component Suppliers Moving Closer
R+D Firms Move Closer
Diseconomies of Scale
Control
Communication
Coordination
Motivation
Returns to Scale
Increasing: %change in output > %change in input
Constant: %change in output = %change in input
Decreasing: %change in output < %change in input
Note 
Flashcards (34)