Economics 0455 · IGCSE · The factors of production
The factors of production — practice question
As laser eye surgery develops, the demand for spectacles is falling in several countries. Sight problems are being treated with more capital equipment and less labour. Some economists predict that opticians’ wages may decline in the future. If wages fall, some opticians may be prompted to retrain for other occupations.
(a)[2]
Using an example, define ‘labour’.
(b)[4]
Explain two reasons why a firm may move from labour-intensive production to capital-intensive production.
(c)[6]
Analyse why the wages of workers in a particular occupation may fall.
(d)[8]
Discuss whether the government ought to subsidise training provision.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Effort supplied by workers / people” …