1.1.5 Specialisation And The Division Of Labour ✅ Flashcards

1
Q

Who was Adam smith and what did he talk about?

A

The father of economics and talked about increase in wealth and productivity.

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2
Q

What is division of labour?

A

Type of specialisation where production is split into tasks which are allocated to people. (Increases productivity). Higher output per worker.
As people gain significant skill in their task.

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3
Q

Where did Adam smith come up with this idea?

A

Observation while visiting a pin factory.

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4
Q

What are some advantages of specialisation/division of labour in organising production?

A
  • higher productivity/efficiency (output per person).
  • training cost reduced (higher profits).
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5
Q

What are some disadvantages of specialisation/division of labour in organising production? How can this be solved?

A
  • work can become tedious / monotonous.
  • this can lead to poorer quality (less output per hour).
  • workers are not flexible

Targeting workers to where they are best suited.

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6
Q

Advantages of specialisation/division of labour to trade?

A
  • higher productivity thus lower costs per unit meaning it will be more competitive internationally.
  • Increased export means economic growth.
  • improved quality of goods makes them more desirable internationally.
  • better variety of goods (income from exports used to by imports).
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7
Q

Disadvantages of specialisation/division of labour to trade?

A
  • regional unemployment (structural unemployment effects local areas of an economy). Due to an industry closing.
  • breakdown in production process can cause chaos. (Toyota 1997).
  • countries become less self-sufficient (struggle when trade suffers).
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8
Q

What is an apposing system to money?

A

Barter (trading one good for another).
- need double coincidence of wants.
- harder to create future contracts (goods can perish).

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9
Q

What are the 4 functions of money? Explain each?

A
  • medium of exchange. (Intermediary between buyer and seller).
  • store of value. (Due to it being stable - most of the time).
  • measure of value. (Can be used to value goods).
  • standard of differed payment. (can allow future agreements as it is physically long-lasting).
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10
Q

What is commodity money?

A

Moneys who’s value comes from a commodity which is made.

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