1.1.5 Specialisation and the division of labour

Question 1

Adam Smith

Answer 1

One of the founding fathers of modern economics. Believed in the free market economy and division of labour

Question 2

Alienation

Answer 2

The estrangement many workers feel from their work, which may reduce their motivation and productivity

Question 3

Division of labour

Answer 3

The specialisation of labour in special tasks, intended to increase productivity

Question 4

Specialisation

Answer 4

A method of production where a business or area focuses on the production of a limited scopeof products or services to gain greater productive efficiency

Question 5

Functions of money

Answer 5

• Medium of exchange- (money) facilitates transactions between buyer and seller
• Store of value- it can be used to save and be exchanged at a later time
• Unit of account- money is a unit of measure used to value and cost products
• Standard of deferred payment- the accepted way, in a given market, to settle the debt

Question 6

What are the key characteristics of money?

Answer 6

•durability
•Portable
•Divisible
•Hard to counterfeit
•Accepted
•Valuable