1.1.5 - Specialisation & The Division Of Labour

Question 1

What Is Specialisation?

Answer 1

Is the concentration of production on a limited range of goods and services.

Question 2

What Is The Division Of Labour?

Answer 2

Is when labour becomes specialised in a particular part of the production process.

Question 3

What Does Specialisation & The Division Of Labour Allow Workers To Do?
(2 Points)

Answer 3

~ Speacialise by focusing on one specific componant of the production process. in which they gain a skill.

~ Results in higher output per worker therefore increases productivity.

Question 4

Who Created The Concept Of Specialisation & The Division Of Labour?

Answer 4

Adam Smith.

Question 5

What Was Adam Smiths Statement About Specialisation & The Division Of Labour?

Answer 5

He stated that the concept showed how it could increase labour productivity, allowing firms to increase efficiency and lower their cost of production.

Question 6

How Did Adam Smith Develop The Ideas For Specialisation & The Division Of Labour?

Answer 6

Based on the observations he made during a visit to a pin factory.

Question 7

What Are The Advantages Of Specialisation & The Division Of Labour In Organising Production?
(4 Points)

Answer 7

~ Creates low skilled jobs.

~ Higher labour productivity, lowers cost for firms can be passed onto consumers.

~ Training is cheap.

~ More cost effective to develop specialist tools.

Question 8

What Are The Disadvantages Of Specialisation & The Division Of Labour In Organising Production?
(4 Points)

Answer 8

~ Demotivation which leads to less productivity and increased worker turnover rates.

~ Higher structural unemployment.

~ Reduction in craftsmanship and lack of variety.

~ If one process is delayed, every other task has to stop.

Question 9

What Are The Advantages Of Specialisation & The Division Of Labour To Trade?
(4 Points)

Answer 9

~ Higher labour productivity means lower unit costs makes firms more competitive.

~ Greater output globally.

~ Increased exports leads to economic growth which can increase domestic incomes.

~ Increases the variety of goods due to higher incomes.

Question 10

What Are The Disadvantages Of Specialisation & The Division Of Labour To Trade?
(4 Points)

Answer 10

~ Structural unemployment.

~ Becoming over-dependant on one particular export.

~ Small businesses might struggle as they cannot compete globally.

~ Leads to resource depletion if using only domestic countries resources.

Question 11

What Was Bartering?

Answer 11

When you swap one good for another.

Question 12

What Are The 4 Key Functions Of Money?

Answer 12

~ Medium of exchange.

~ Measure of value.

~ Store of value.

~ Method of deferred payment.

Question 13

What Is The Problem With Bartering?

Answer 13

Requires two people to want each others good.

Question 14

What Is Meant By ‘Medium Of Exchange’?

Answer 14

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

Question 15

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

Answer 15

~ Comparing the value of two goods.

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

Question 16

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

Answer 16

~ Money holds its value over time.

~ Meaning money can be saved.

Question 17

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

Answer 17

~ 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.