1.1.5 Specialisation and division of labour Flashcards
Specialisation
Labour allocate all their time into producing just one good or service
Division of labour
Production is broken down into different tasks and labour is allocated to each task
Advantages - Increased productivity
Allows workers to become more skilled and experienced in specific tasks, leading to higher efficiency
Advantages - Decreased unit costs
Specialised workers can produce more output in the same amount of time (before specialising) as they are more productive
Advantages - Saves training costs and time
With specialisation firms only have to train each worker in one particular task
Disadvantages - Higher staff turnover or absenteeism
Workers may find repetitive tasks monotonous and unrewarding, leading to job dissatisfaction
Disadvantage - Dependency
Over-reliance on one work/task/factory makes units vulnerable to staff illness or economic shocks
Disadvantage - Reduces quality
Workers specialising on just one particular task become demotivated, this leads to workers losing interest and not caring about the quality of the products they are producing
Money
Anything accepted in payment of a debt; removes the need to barter
Characteristics of money
-Acceptable to all
-Portable
-Easily divisible
-Durable
-Scarce in supply
Functions of money - Medium of exchange
We can use money to trade goods and services
Functions of money - Unit of account
Money helps us to compare prices of different products
Functions of money - Store of value
You can store your money and save it for later
Functions of money - Deferred payment
You can borrow money to buy goods now, and then pay the money back in the future