Study Notes
Productivity refers to the efficiency of production, measured by the amount of output per unit of input. Division of labour is a form of specialization where each worker focuses on a specific task, increasing efficiency.
- Productivity — the amount of output measured against the amount of inputs used in the production process.
Example: A factory producing 100 units with 10 workers has higher productivity than one producing 100 units with 20 workers. - Labour Productivity — the amount of units produced in a period in proportion to the number of employees.
Example: If a company produces 200 units with 10 employees, its labour productivity is 20 units per employee. - Capital Productivity — the amount of units produced in a period in proportion to the number of machines used.
Example: A factory using 5 machines to produce 500 units has a capital productivity of 100 units per machine. - Division of Labour — a form of specialization where each worker performs one task.
Example: In a car factory, one worker may only install doors while another paints the car.
Exam Tips
Key Definitions to Remember
- Productivity
- Division of Labour
- Labour Productivity
- Capital Productivity
Common Confusions
- Confusing productivity with total output
- Believing division of labour always leads to higher motivation
Typical Exam Questions
- What is productivity?
Productivity is the amount of output per unit of input. - How does division of labour benefit businesses?
It increases efficiency and lowers costs. - What are the disadvantages of division of labour for employees?
It can lead to boredom and repetitive strain injuries.
What Examiners Usually Test
- Understanding of how productivity can be increased
- Advantages and disadvantages of division of labour for businesses and employees