Without specialised raw materials and high-purity silicon wafers, modern digital infrastructure could not exist. Silicon wafers act as a critical factor of production in industries producing microchips, smartphones, and advanced medical imaging equipment. The production of smartphones relies on sophisticated processors containing billions of silicon-based transistors. Without a stable supply of high-grade silicon, it would be impossible to scale up global computing capacity. The transition to automated industrial machinery would also be severely delayed.
Currently, East Asian manufacturers supply over 90% of the world's leading-edge microchips. This concentration of production has led regional governments to closely monitor export quotas. In 2022, supply chain disruptions led to global shortages, demonstrating how supply-side inelasticity can amplify price fluctuations. Relying on centralised production nodes gives specific firms and regions a powerful competitive advantage in high-technology manufacturing.
Define the term ‘factor of production’ (Extract C, lines 2–3).
123 exam-style questions on AQA A Level Economics 1.1 Economic methodology and the economic problem, covering 1.1.1 Economic methodology, 1.1.2 The nature and purpose of economic activity, 1.1.3 Economic resources, 1.1.4 Scarcity, choice and the allocation of resources, and 1.1.5 Production possibility diagrams. Each one has a worked solution and a mark scheme showing where the marks go.