1.1.5 - Specialisation & The Division Of Labour

Question 1

What Is Specialisation?

Answer 1

The concentration of production on a narrow range of goods or services.

Question 2

What Are The Advantages Of Specialisation?
(5 Points)

Answer 2

~ Maximum output being achieved, as all resources are being concentrated on it.

~ Wider range of goods and services, within the industry.

~ Greater allocative efficiency, resources go towards inefficient to efficient production in an industry.

~ Drive higher productivity, as workers specialise they are then used better.

~ Quality improvements.

Question 3

What Are The Disadvantages Of Specialisation?
(4 Points)

Answer 3

~ Finite resources.

~ Change in fashion and tastes away from the product.

~ De-industrialisation, other industries may become more efficient than others.

~ National interdependence, on exports and imports with regards to resources.

Question 4

What Is The Division Of Labour?

Answer 4

Breaking down the production process into separate tasks upon specialisation.

Question 5

What Are The Advantages Of The Division Of Labour?
(3 Points)

Answer 5

~ Worker productivity increases, which benefits workers and the firm.

~ Specialist capital for workers, increasing productivity even more.

~ Lower prices, high quantity and choice and higher quality.

Question 6

What Are The Disadvantages Of The Division Of Labour?
(4 Points)

Answer 6

~ Demotivation of workers.

~ Higher worker turnover.

~ Risk of long term unemployment, due to massive overspecialisation.

~ Highly standardised goods / services, loosing unique touch.

Question 7

What Are The 4 Key Functions Of Money?

Answer 7

~ Medium of exchange.

~ Measure of value.

~ Store of value.

~ Method of deferred payment.

Question 8

What Is The Problem With Bartering?

Answer 8

Requires two people to want each others good.

Question 9

What Is Meant By ‘Medium Of Exchange’?

Answer 9

Money can be used to buy and sell products and is acceptable everywhere.

Question 10

What Is Meant By ‘Measure Of Value’?
(2 Points)

Answer 10

~ Comparing the value of two goods.

~ Allows both consumers and producers to make decisions in their best interests.

Question 11

What Is Meant By ‘Store Of Value’?
(2 Points)

Answer 11

~ Money holds its value over time.

~ Meaning money can be saved.

Question 12

What Is Meant By ‘Method Of Deferred Payment’?
(2 Points)

Answer 12

~ Money is an acceptable way to arrange terms of credit and settle any future debts.

~ Allows producers and consumers to acquire goods now and pay for them in the future.

Question 13

What Are Characteristics Of Money?
(6 Points)

Answer 13

~ Acceptable.

~ Portable.

~ Durable.

~ Divisible.

~ Limited in supply, keeping its worth.

~ Difficult to forge.