Business 7115 · O Level · Production of goods and services
Production of goods and services — practice question
CGM uses job production to make high quality shoes. This production method relies on specialisation. CGM operates in a niche market. The managers at CGM understand that every business activity generates external costs, so they always try to behave in ways that protect the environment. The Operations Director wants profit to rise. CGM could either purchase cheaper raw materials or add new technology to the production process. The new technology would cost $30000 and could cut the workforce from 30 to 26.
(a)[2]
Identify two advantages gained from specialisation.
Advantage 1:
Advantage 2:
(b)[2]
What is meant by the term ‘external cost’?
(c)[4]
Identify and explain two ways that CGM could adopt to protect the environment.
Way 1:
Explanation:
Way 2:
Explanation:
(d)[6]
Identify and explain one advantage and one disadvantage for CGM of using job production.
(e)[6]
Do you think CGM should introduce new technology into the production process? Justify your answer using reasons.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Increased output OR faster production OR higher productivity OR greater efficiency” …