NSS Exploring Economics 2

Consolidation Worksheets

Chapter 9 Production and division of labour

Test yourself
9.1
Under what situation is a digital camera a consumer good? Under what situation is it a
producer good? Explain.

Answers:
If the digital camera is bought by a household to take family photos, it is a _________
good. If it is bought by a newspaper publisher for reporting news, it is a ___________
good.

9.2
‘In primary production, raw materials are extracted from nature. In secondary
production, semi-finished products are produced from raw materials. In tertiary
production, final products are produced from semi-finished products.’ Explain if this
statement is correct.

Answers:
Incorrect. In secondary production, ___________ are transformed into semi-finished
products or _______ products. In tertiary production, _______ are provided.

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Consolidation Worksheets (Chapter 9)
9.3 The following diagram shows the various stages involved in the production and
distribution of garments. Identify the type of production that each stage belongs
to.

Stages Type of production

Cotton cultivation production

Transporting cotton production

Spinning production

Weaving production

Garment manufacturing production

Wholesaling production

Retailing production

Consumption

9.4
Refer to the pie charts below. The percentage contribution of secondary production to
total employment dropped from 42.4% in 1987 to 13.2% in 2007.

1987 2007

a. Does this imply that the number of workers employed in secondary production
has dropped? Explain.

b. Does this imply that the value of secondary production has dropped? Explain.

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Consolidation Worksheets (Chapter 9)
Answers:
a. No, it may not.

Percentage contribution _____________________

of a sector to total ＝ × 100%
______________________
employment
______________________
_____
The number of workers employed in secondary production can _______ even if
the percentage contribution of secondary production to total employment drops.
This happens when the percentage increase in the number of workers employed
in secondary production is __________ than the percentage increase in total
employment.

b. No, it may not.

(Total) Value of ________________ _______________________

production ＝ ________________
× _______________________

The value of secondary production can _________ even if the percentage

contribution of secondary production to total employment drops. This happens
when the number of workers employed in secondary and/or their average value
of production ___________ .

9.5
How does division of labour raise labour productivity?

Answers:
__________ of labour is measured by the output produced per unit of labour. Division
of labour _____ productivity because of the following reasons.
1. Assigning the ____ person to do the right job.
2. Practice makes ______.
3. Saving time in _______.
4. Saving time in _______ around jobs.
5. ______ capital goods are needed in production. As a result, the firm can afford to
provide sufficient tools for each worker to improve __________.
6. _____________ is stimulated.

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Consolidation Worksheets (Chapter 9)
9.6
Explain if the following statement is true, false or uncertain:
‘A better transportation network tends to increase the extent of division of labour.’

Answers:
True / False. A better transportation network can the market size
and the extent of the division of labour.

9.7
Suggest an example for each of the following:
a. Production requiring a higher degree of division of labour
b. Production requiring a lower degree of division of labour

Answers:
a. Examples: _________________________________
b. Examples:__________________________________
(Accept other reasonable answers.)

Short questions

1. The first in class is usually selected to be the class representative in an inter-class

academic quiz.
a. Explain why organising and participating in an inter-class academic quiz can
be regarded as production. (2 marks)
b. Explain why we have the above arrangement. What is the economic principle
applied? (3 marks)

Answers:
a. ______________________________________________________________

______________________________________________________________
b. The principle of ___________________ is applied.
Assigning the right person to do the ___________ job can increase
____________. Selecting the first in class is believed to make the quiz more
enjoyable and educational (i.e. more productive).

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Consolidation Worksheets (Chapter 9)
2. Many foreign domestic helpers are employed to do housework in Hong Kong..
a. What kinds of outputs are provided by foreign domestic helpers — good or
service, consumer good or producer good? Explain. (4 marks)
b. In which type of production do foreign domestic helpers engage? Explain.
(2 marks)
Answers:
a. They provide _______________,
as their outputs e.g. babysitting, buying food and cleaning are mostly
___________.
They produce _________________ (services),
as they are employed by households (____________) to do housework.
b. They engage in ____________ production,
as they provide __________.

3. Explain whether a book in a public library is

a. a free good or an economic good; (3 marks)
b. a consumer good or a producer good. (3 marks)

Answers:
a. A book in a public library is (a free / an economic) good,
as its quantity available is insufficient to satisfy all human ________ for it.
People want to have ________ books in different categories.
b. A book in a public library is a (consumer / producer) good,
as it is provided by the _____________ (a producer) to offer ___________ to
the public.

4. Peter buys wood from a shop and makes wooden furniture himself. He sells his
products in a flea market.
a. In which types of production is Peter involved? Explain. (4 marks)
b. Suggest ONE type of primary product, secondary product and tertiary product
that Peter needs in production. (3 marks)

Answers：
a. Peter is involved in_____________ production,
as he uses wood (_______________) to make wooden furniture (_______
__________). He is also involved in _____________ production, as he
offers______________ services by selling his products in a flea market.

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Consolidation Worksheets (Chapter 9)
 b. Primary product: ____________________________________.
Secondary products: _________________________________.
Tertiary products: ___________________________________.

5. Compared with a Chinese restaurant, does your school tuck shop practise a lesser
or greater extent of division of labour? Give TWO reasons for this. (5 marks)

Answers:
The school tuck shop practises a (greater / lesser) extent of division of labour.
Reasons:
 _______________________________________________________________

______________________________________________________________

 _______________________________________________________________

______________________________________________________________

Structured questions
1. The following table shows the contribution of various economic activities to the
total value of production in Hong Kong.

Total value of production by economic activity (%)

2000 2007
Agriculture and 0.1 0.1
fishing
Mining and * *
quarrying
Manufacturing 5.4 2.5
Electricity, gas and 2.9 2.6
water
Construction 4.9 2.6
Services 86.6 92.3
Total 100.0 100.0
* Less than 0.05% Source: Census and Statistics Department

a. According to the above figures, find the percentage contribution of primary

production, secondary production and tertiary production to the total value of
production in Hong Kong in 2000, respectively. (3 marks)
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Consolidation Worksheets (Chapter 9)
 b. Explain if the above figures show that
i. the value of primary production remained unchanged between 2000 and
2007. (3 marks)
ii. the number of employees in tertiary production increased between 2000
and 2007. (3 marks)
c. Explain why the three types of production are interdependent. (6 marks)

Answers：
a. Among various economic activities, ____________________, ___________
______________ belong to primary production. The percentage contribution
of primary production to the total value of production in Hong Kong was
______% in 2000.
Among various economic activities, ____________, ___________________
___________ and ________________ belong to secondary production. The
percentage contribution of secondary production was _________% in 2000.
Among various economic activities, __________ belong to tertiary
production. The percentage contribution of tertiary production was _____%
in 2000.

b i. (Yes / No)
Percentage contribution of Total value of
The value of
= primary production to the × production
primary production
total value of production

 Though the percentage contribution of primary production remained at

_____% between 2000 and 2007, the value of primary production might
change in _____________ to the total value of production.

ii. (Yes / No)

 The percentage increase in the average value of production of employees
in tertiary production might be ____________ than the percentage
decrease in the number of employees in tertiary production between
2000 and 2007;
 The total value of primary and secondary production might drop greatly
between 2000 and 2007 due to the _________ in their number of
employees and/or their average value of production of employees.

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Consolidation Worksheets (Chapter 9)
 c. ______________________________________________________________

______________________________________________________________

______________________________________________________________

For example, primary production uses ___________ from secondary

production and warehousing services from tertiary production.
Secondary production uses _____________ from primary production and
transportation services from tertiary production.
Tertiary production uses raw materials from primary production and
_____________ from secondary production.

2. In Hong Kong, different government officials have different duties. For example,
the Chief Executive, the Financial Secretary and the Secretary for Justice perform
different roles in the Hong Kong Government.
a. What economic principle is illustrated by this practice? (1 marks)
b. Explain THREE advantages and TWO disadvantages of this practice.
(10 marks)
Answers:
a. ________________________

b. Advantages：
 ___________________________________________________________

___________________________________________________________

 ___________________________________________________________

___________________________________________________________

 ___________________________________________________________

___________________________________________________________
Disadvantages：
 ___________________________________________________________

___________________________________________________________

 ___________________________________________________________

___________________________________________________________
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Consolidation Worksheets (Chapter 9)
 Suggested Answers

Test yourself

9.1
If the digital camera is bought by a household to take family photos, it is a consumer
good. If it is bought by a newspaper publisher for reporting news, it is a producer
good.
(Accept other reasonable answers.)

9.2
Incorrect. In secondary production, raw materials are transformed into semi-finished
products or finished products. In tertiary production, services are provided.

9.3

Stages Type of production

Cotton cultivation Primary production (using farmland directly)
Transporting cotton Tertiary production (transportation is intangible)
Spinning Secondary production (turning cotton into thread)
Weaving Secondary production (turning thread into cloth)
Garment manufacturing Secondary production (turning cloth into clothing)
Wholesaling Tertiary production (wholesaling is intangible)
Retailing Tertiary production (retailing is intangible)
Consumption

9.4
a. No, it may not.

Percentage contribution Number of workers employed in the sector

of a sector to total ＝ × 100%
Total number of workers employed
employment
in all sectors

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Consolidation Worksheets (Chapter 9)
 The number of workers employed in secondary production can rise even if the
percentage contribution of secondary production to total employment drops. This
happens when the percentage increase in the number of workers employed in
secondary production is smaller than the percentage increase in total
employment.

b. No, it may not.

(Total) Value of Number of workers Average value of

production ＝ employed
× production of workers

The value of secondary production can rise even if the percentage contribution
of secondary production to total employment drops. This happens when the
number of workers employed in secondary and/or their average value of
production rise (s).

9.5
Productivity of labour is measured by the output produced per unit of labour.
Division of labour raises productivity because of the following reasons.
1. Assigning the right person to do the right job.
2. Practice makes perfect.
3. Saving time in training.
4. Saving time in moving around jobs.
5. Fewer capital goods are needed in production. As a result, the firm can afford to
provide sufficient tools for each worker to improve productivity.
6. Mechanisation is stimulated.

9.6
True. A better transportation network can enlarge the market size and increase the
extent of the division of labour.

9.7
a. Examples: television broadcasting / newspaper publishing / hospital services
b. Examples: the repair of home appliances / newspaper retailing / driving
(Accept other reasonable answers.)

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Consolidation Worksheets (Chapter 9)
Short questions

1 a. The organisers and class representatives use resources e.g. time to provide
an entertaining and educational programme to audiences. Hence, organising
and participating in an inter-class academic quiz can be regarded as
production.
(Accept other reasonable answers.)

b. The principle of division of labour is applied.

Assigning the right person to do the right job can increase productivity.
Selecting the first in class is believed to make the quiz more enjoyable and
educational (i.e. more productive).

2 a. They provide services,

as their outputs e.g. babysitting, buying food and cleaning are mostly
intangible.
They produce consumer goods (services),
as they are employed by households (consumers) to do housework.

b. They engage in tertiary production

as they provide services.

3 a. A book in a public library is an economic good,

as its quantity available is insufficient to satisfy all human wants for it.
People want to have more books in different categories.

b. A book in a public library is a producer good,

as it is provided by the government (a producer) to offer services to the
public.

4 a. Peter is involved in secondary production, as he uses wood (raw materials)

to make wooden furniture (finished products).
He is also involved in tertiary production,
as he offers retailing services by selling his products in a flea market.

b. Primary product: timber

Secondary products: saw / nails / screw / electricity
Tertiary products: transportation / services provided by sellers of raw

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Consolidation Worksheets (Chapter 9)
 materials / organisers of the flea market

5. The school tuck shop practises a lesser extent of division of labour.

Possible reasons:
• products offered by a school tuckshop are limited. Cooking may be
prohibited and it may only supply snacks, sweets, drinks, cup noodles,
ready-made sandwiches, etc;
• the service hours are much shorter – recess, lunchtime, before and after
school;
• customers are restricted and small in number.
On the whole, since the size of the market (in terms of sales revenue) is small, it
cannot support the large number of workers needed to practise a larger extent of
division of labour.
(Two of the above reasons.)

Structured questions

1 a. Among various economic activities, agriculture and fishing, mining and

quarrying belong to primary production. The percentage contribution of
primary production to the total value of production in Hong Kong was 0.1%
in 2000.
Among various economic activities, manufacturing, electricity, gas and
water and construction belong to secondary production. The percentage
contribution of secondary production was 13.2% (= 5.4% + 2.9% + 4.9%) in
2000.
Among various economic activities, services belong to tertiary production.
The percentage contribution of tertiary production was 86.6% in 2000.

b i. No.
Percentage contribution of Total value of
The value of
= primary production to the × production
primary production
total value of production

Though the percentage contribution of primary production remained at

0.1% between 2000 and 2007, the value of primary production might
change in proportion to the total value of production. (2 marks)

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Consolidation Worksheets (Chapter 9)
 b ii. No.
 The percentage increase in the average value of production of employees

in tertiary production might be greater than the percentage decrease in

the number of employees in tertiary production between 2000 and 2007;
OR
 The total value of primary and secondary production might drop greatly

between 2000 and 2007 due to the decrease in their number of

employees and/or their average value of production of employees.

c. With division of labour, each type of production specialises in producing a

good or a particular production stage of a good. However, production of a
good requires the output of other production, e.g. the supply of resources,
the help of equipment and machines, and the use of energy and
transportation services. Hence, the three types of production are
interdependent.
For example, primary production uses machines from secondary production
and warehousing services from tertiary production.
Secondary production uses raw materials from primary production and
transportation services from tertiary production.
Tertiary production uses raw materials from primary production and
instruments from secondary production.

2 a. Division of labour.
b. Advantages:
• Assigning the right person to do the right job increase workers’
productivity;
• Practice makes perfect and hence workers become more skilful;
• Training time can be saved for production;
• Time in moving around jobs can be saved for production;
• Since fewer capital goods are needed in production, firms can afford to
offer workers sufficient capital goods to raise productivity;
• Capital goods are in use all the time and are used by the most appropriate
workers;
• Specialisation stimulates mechanisation, promotes technological
advancement and improves productivity;
• People can have more leisure, a larger volume and a greater variety of
goods for consumption, and hence living standard are improved.
(Any THREE points.)
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 Disadvantages:
• Since workers repeat a simple task day after day, work becomes boring;
• With specialisation, it is difficult for workers to recognise their
contribution and have job satisfaction;
• With specialisation, different production stages and industries are
interdependent. Disruption in one will hinder the others;
• With specialisation, workers have limited skills required for their
production stage only;
• Since workers have limited specialised skills, once they are unemployed,
it is difficult for them to find a new job;
• Products are standardised under mass production and this reduces
consumers’ choices and satisfaction.
(Any TWO points.)

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Consolidation Worksheets (Chapter 9)