1.1.5 - specialisation and division of labour

Question 1

What is specialisation?

Answer 1

Focusing on a specific skill, activity, production process or the production of a limited range of commodities.

Question 2

How does specialisation increase the volume of output?

Answer 2

Highly specialised workers become more efficient speeding up production and minimising waste. This reduces production costs and increases output volume.

Question 3

What are the advantages of specialisation for consumers, firms, workers and the government?

Answer 3

• Consumers = Better quality, cheaper stuff, more choice = utility
• Workers = gain skills and receive higher wages so they are more productive and their job is easier and less stressful
• Firms = Increased productivity , higher profit, reduced training and equipment costs, surplus output can be exported
• Government = higher corporation tax due to profitable firms. Higher income tax, job creation and higher wages. Reduced burden on the state, less subsidies and support for firms.

Question 4

What are the disadvantages of specialisation for consumers, workers and firms?

Answer 4

• Consumers = disruption leads to shortages and increased prices, less domestic choice, uncertainty and price fluctuations.
• Workers = tedious, monotonous and repetitive, less enjoyment and fulfilment.
• Firms = lower labour productivity due to boredom so higher costs, narrow focus makes firms vulnerable to demand fluctuations, lack of diversification.

Question 5

What is the division of labour?

Answer 5

When labour is divided in the sense that the production process is split into lots of individual operations. Each operation is the special task of one worker.