Productive Efficiency | Edexcel A-Level Economics B (9EB0)
Productive Efficiency
- 90 questions
- 6 subtopics
- Theme 2: the wider economic environment
- Paper 2 and Paper 3
Productive Efficiency is examined in Paper 2, Competing in the global economy, and in Paper 3, The economic environment and business.
It covers productivity, wages and competitiveness, labour intensive and capital intensive production, capacity utilisation, quality control, quality assurance and Total Quality Management, Kaizen, just in time and lean production and average costs, waste and product development lead times.
Sample questions from Productive Efficiency
Answer each one closed book first, then open the answer.
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Productivity, wages and competitiveness
Name three factors that influence labour productivity.
Show the answer
The skills and training of the workforce, the quantity and quality of capital equipment, and worker motivation all influence labour productivity. -
Productivity, wages and competitiveness
Why can higher productivity allow a firm to pay higher wages without losing competitiveness?
Show the answer
Each worker produces more, so the extra output covers the extra pay and the cost of each unit does not rise. -
Labour intensive and capital intensive production
State two advantages of capital intensive production.
Show the answer
Output is consistent in quality, and machinery can run continuously without breaks or wages. -
Labour intensive and capital intensive production
Why is a capital intensive firm more vulnerable to a fall in demand?
Show the answer
Its costs are largely fixed, so they continue at low output and losses build quickly when capacity stands idle. -
Capacity utilisation
A factory operating at 90% capacity utilisation produces 10,800 units. Calculate its maximum possible output.
Show the answer
Its maximum possible output is 12,000 units. -
Capacity utilisation
Why can raising utilisation by cutting price leave a firm worse off?
Show the answer
If demand is price inelastic the extra volume does not compensate for the lower price, so revenue falls even though utilisation rises. -
Quality control, quality assurance and Total Quality Management
Why does Total Quality Management require a change in corporate culture?
Show the answer
Responsibility for quality moves from an inspection department to every worker, which only works if staff are trained, trusted and willing to halt production. -
Quality control, quality assurance and Total Quality Management
Why does poor quality damage a firm more in the digital economy than it once did?
Show the answer
Dissatisfied customers publish reviews that every potential buyer can read, so a quality failure now reduces demand far beyond the customer involved.
The 6 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Productivity, wages and competitiveness | Productivity and the formula for labour productivity, calculating output per worker and per hour, production against productivity, factors influencing productivity, capital investment and training, unit labour costs and calculating them, wages and competitiveness, international competitiveness, long-run growth, jobs, and measuring service productivity. | 16 |
| Labour intensive and capital intensive production | Labour intensive and capital intensive production with examples, relative factor prices, the advantages and disadvantages of each method, personalised services, capital intensity and break-even output, vulnerability to falling demand, low-wage economies, automation and cost structure, and intensity as a matter of degree. | 13 |
| Capacity utilisation | Full and spare capacity, the formula for capacity utilisation and calculating it and maximum output, falling average cost at higher utilisation, the problems of low and very high utilisation, targeting around 90%, ways to raise utilisation, rationalisation, price cuts, seasonal utilisation, and when to add capacity. | 17 |
| Quality control, quality assurance and Total Quality Management | Quality control against quality assurance, Total Quality Management and the culture change and costs it needs, end-of-line inspection, getting it right first time, quality and revenue, quality circles, accredited standards, quality in the digital economy, recall costs, demand, niche markets, and minimum quality for low-price firms. | 15 |
| Kaizen, just in time and lean production | Kaizen, employee involvement and its benefits and main limitation, just-in-time stock management, its cost savings, supplier reliability and main risk, just in time against just in case, cash flow, lean production and the waste it removes, competitive advantage, responsiveness to demand, and volatile demand. | 15 |
| Average costs, waste and product development lead times | Average cost and calculating it, reducing waste and price competitiveness, lean production against economies of scale, lead time in product development and the advantages, lower risk and better cash flow of a short one, simultaneous engineering, the social value of less waste, calculating profit, and why lower average cost does not guarantee profit. | 14 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
Edexcel A-Level Economics B Active Recall Guide
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