1.1.5 Specialisation and the Division of Labours

Question 1

What is specialisation

Answer 1

when we concentrate on producing a specific product or task

Question 2

What is division of labour

Answer 2

is the breaking down of a production process of a good/service into smaller tasks, each of which is carried out by a different person/factor input
No one person is able to produce an entire product

Question 3

Who wrote about Division of labour in which book

Answer 3

Adam Smith

The Wealth of Nations

Question 4

What are the 3 possible gains from specialisation

Answer 4

1) Higher output
2) Variety - consumers access to greater variety of higher quality goods
3) A bigger Market - Specialisation + global trade increases the size of the market offering opportunities for economies of scale to be exploited

Question 5

7 Possible disadvantages from specialisation

Answer 5

1) Unrewarding repetitive work that requires little skill can lower motivation/productivity
2) Workers may take less pride in work and quality suffers
3) increased absenteeism
4) increased risk of repetitive strain injuries
5) People may move less boring jobs, leading high worker turnover and increased hiring/training costs
6) Worker receive little training and may be unable to find alternative jobs
7) Mass-produced standardised goods may lack variety

Question 6

What is money

And how does it relate to specialisation

Answer 6

Money is anything that is generally acceptable for the settlement of a debt
Specialisation has lead to the needed of money as services can no longer be bartered in a double coincidence of wants

Question 7

What are the 4 main functions of money

Answer 7

1) A medium of exchange
2) A store of value
3) A Unit of account/measurement
4) A standard of deferred payment

Question 8

Key characteristics of money

Answer 8

1) Durability
2) Portable
3) Divisible
4) Hard to counterfeit
5) Accepted
6) Valuable