Topic Questions (MCQ – EASY): Factors of Production and Specialisation – 3auk

Duong Than Binh started his career by buying towels, needles, shampoo and soap and selling them as a street vendor at the age of twelve. Currently, he runs three hotels in Hanoi.

Which factors of production are likely to be involved in the above events?

Land only

Land and labor only

Land, labor, and capital only

Land, labor, capital, and enterprise

In an effort to become more efficient, a kitchen manufacturer decided to move to an industrial estate and increase the division of labour in its production process.

Which of the following statements regarding the division of labour is accurate?

It occurs only in the manufacturing industry.

It occurs only in market economies.

It occurs only when similar firms are situated in the same area.

It takes place only when workers become more specialized.

Which of the following best represents an example of the factor of production known as capital?

The balance in a small business's savings account, which is intended for future purchases.

A forest consisting of hardwood trees suitable for making furniture.

The market value of a company's shares.

Word processing software used by a writer to complete her new book.

Which of the following best describes the role of the entrepreneur in contemporary economies?

The entrepreneur only contributes financial capital to the production process.

The entrepreneur is responsible for all decision-making in the production process.

The entrepreneur takes on risk and coordinates the other factors of production to create and introduce new products or services.

The entrepreneur provides labor and expertise in the production process.

Which of the following best distinguishes between human capital and physical capital?

Human capital refers to the tangible assets owned by a firm, while physical capital refers to the knowledge and skills of its workforce.

Physical capital is used to produce goods and services, while human capital is not used in the production process.

Human capital refers to the education, skills, and knowledge possessed by individuals, while physical capital refers to the tangible assets such as machinery, buildings, and equipment.

Physical capital is created by investing in education and training, while human capital is the result of investing in tangible assets.