Production — Important Questions

Process Based Division of Labour

Step 1: Identify the two types of division of labour — product based and process based. Step 2: In product based division, a single worker specialises in making one complete product (e.g., a potter making pots). Step 3: In process based division, the production of one commodity is split into many processes, and each worker handles only one or two processes. Step 4: In this bakery example, bread-making is divided into multiple processes — kneading, baking, packing — and different workers handle each process. Step 5: No single worker makes the complete bread. This is clearly Process Based Divisi

12

Step 1: Recall the formula for Average Product: AP = TP ÷ L, where L is the number of labour units. Step 2: Given values: TP = 36, L = 3. Step 3: Apply the formula: AP = 36 ÷ 3 = 12. Step 4: Option A (36) is the TP itself, not AP. Option B (14) is the MP at L=3 (from the textbook table), not AP. Option D (108) results from multiplying TP × L, which is incorrect. Step 5: AP tells us output per worker. With 3 workers producing 36 units, each worker on average contributes 12 units. Answer is 12.

Bata Shoe Company producing and selling shoes

Step 1: Recall the definition — a firm is an INDIVIDUAL production unit that produces goods or services for sale in the market. Step 2: 'The entire shoe manufacturing sector' and 'All companies producing automobiles' describe INDUSTRIES (groups of firms), not a single firm. Step 3: 'The agriculture sector' is also an industry-level concept. Step 4: Bata Shoe Company is one specific, individual production unit that produces shoes for sale — this perfectly matches the definition of a firm. Step 5: Remember: Firm = individual unit; Industry = all firms producing the same type of good.

Foreign Production Unit (Collaboration)

Step 1: Identify the key features — joint ownership between Indian and foreign partners, with foreigners holding more than 50% capital. Step 2: A Collaboration is a production unit jointly owned by residents and non-residents. Step 3: Since foreigners hold more than 50% of total capital, it is classified as a foreign production unit. Step 4: A Multinational (MNC) has its main office in one country and operations in many countries — Maruti-Suzuki is specifically a joint venture, making it a Collaboration. Step 5: Departmental enterprises are government-run. Indigenous units are fully owned by I