Specialisation, Division of Labour and Exchange 1 - A Level Economics MCQ Quiz

Question 1/9

Before money was widely used, trade relied on barter - directly swapping one good or service for another. Which one of the following is most likely to be a problem specifically caused by relying on barter rather than money?

An increase in government intervention in markets. An increase in the overall level of prices. A shortage of skilled labour in the economy. A fall in the economy's total production possibilities. Difficulty finding someone who both has what you want and wants what you have to offer.

Question 2/9

As a bakery increases its scale of production, it introduces greater specialisation among its workers - one baker focuses only on bread, another only on pastries, rather than each doing both. All other things being equal, this specialisation is most likely to

increase the bakery's total costs reduce the bakery's unit cost of production. increase the bakery's unit cost of production. reduce the bakery's total output. increase the amount of capital needed per worker.

Question 3/9

A distribution warehouse employed 40 workers and dispatched 4,000 parcels last month. This month, it employed 55 workers and dispatched 4,400 parcels. Which one of the following is correct?

Production has risen, but labour productivity has fallen. Both production and labour productivity have risen. Both production and labour productivity have fallen. Production is unchanged, but labour productivity has risen. Production has fallen, but labour productivity has risen.

Question 4/9

Index numbers of labour productivity for two firms, using 2018 as the base year (2018 = 100), are shown in the table below. Which one of the following can be concluded from this data?

Index of labour productivity (2018 = 100)

Year	Firm P	Firm Q
2018	100	100
2019	108	112
2020	118	119

Firm P's labour productivity more than doubled between 2018 and 2020. Labour productivity fell in Firm P between 2019 and 2020. Labour productivity was identical in both firms in 2020. Firm Q had a higher level of labour productivity than Firm P throughout. Labour productivity grew at a faster rate in Firm Q than in Firm P between 2018 and 2019.

Question 5/9

A small accountancy firm decides that one partner will handle only tax returns, another only audits, and a third only business advisory work, rather than each partner doing a bit of everything. This is an example of

economies of scope. specialisation. vertical integration. price discrimination. perfect competition.

Question 6/9

A hospital employs separate staff for surgery, anaesthesia, nursing and administration, rather than having each staff member perform all of these roles. What economic concept does this best illustrate?

Occupational immobility of labour. The division of labour. Derived demand. Economies of scale. A merit good.

Question 7/9

Which one of the following is most likely to be a disadvantage of specialisation and the division of labour for a worker?

Higher wages due to increased skill in one task. A wider range of skills that can be used in many different jobs. A lower risk of becoming unemployed. A narrow set of skills, making it harder to find new work if demand for that particular job falls. Greater bargaining power with employers.

Question 8/9

A saver keeps £5,000 in a bank account for two years, confident that it will still be able to buy a similar quantity of goods when withdrawn. This relies on money acting as a

medium of exchange. store of value. unit of account. legal tender. standard of deferred payment.

Question 9/9

Which one of the following is a genuine function of money?

To act as a store of value. To eliminate market failure. To act as a signal of consumer preferences only. To guarantee full employment in the economy. To act as an incentive to invest in new capital.