Production and Productivity — Firms & Production | IGCSE Economics

Exam Frequency Analysis

Past paper frequency (2018 to 2024)

This topic accounts for approximately 4% of your exam marks.

new

Rare

New4%

New emphasis in the 2027 syllabus; demand for factors of production, labour- vs capital-intensive production, and the effects of investment on productivity are examined directly. Guidance based on specimen materials.

These two terms are easily confused, and exams test the difference directly.

Production is the total output of goods and services a firm or economy makes.

is output per unit of a factor of in a given time, most often output per worker (or per worker-hour). It measures efficiency, not just total quantity.

A firm can raise production simply by using more inputs (hiring more workers, running more machines). Raising productivity means getting more output from each input, which lowers average costs.

Influences on production and productivity include:

the quantity and quality of factors available (more or better land, labour, capital);
education and training, which raise workers' skills;
technology and capital equipment, which let workers produce more per hour;
worker motivation, since better-motivated workers produce more;