1.5 Specialisation And Division Of Labour

Question 1

What is specialisation?

Answer 1

It is the concentration of resources on a specific task or product

Question 2

What are the benefits of specialisation?

Answer 2

QUANTITY, PRODUCTIVITY AND EFFICIENCY INCREASES
- Higher output : production is raised and quality can be improved
- Consumers have more choice : larger range of goods and services produced
- A bigger market : there is more trade and growth because of a higher output
- Economies of scale : An increase in the size of the market leads to a lower unit cost

Question 3

What are the disadvantages of specialisation?

Answer 3

Makes a firm vulnerable to a change in global demand:

Resources are finite (what happens if they run out?)
National interdependence : (what happens if there is a war?)

Question 4

What is division of labour?

Answer 4

It is the specialisation of workers on specific tasks in the production process

Question 5

What are the advantages of division of labour?

Answer 5

• Can raise productivity
• Workers feel valued which raises productivity which lowers the supply cost per unit
• Efficient
• Workers become more skilled through repetition of tasks

Question 6

Disadvantages of division of labour

Answer 6

• Repetitive work can lower motivation which leads to lower productivity
• Workers take less pride in their work as it is repetitive which means the quality of the good will suffer
  -Expensive to train all workers

Question 7

What is the relationship between specialisation and the division of labour?

Answer 7

When division of labour occurs, work has been specialised in that specific field of production; and the whole production process happens more efficiently

Question 8

What is productivity?

Answer 8

It is how efficiently input is used to produce output

Question 9

What is the equation for productivity?

Answer 9

Output produced / total input used

Question 10

What does increased productivity lead to?

Answer 10

Higher output and higher quality. This is due to a more efficient use of resources

Question 11

What are the 2 methods of trading?

Answer 11

Money
Bartering - exchange of goods

Question 12

What are the main functions of money?

Answer 12

1. Medium of exchange (something commonly accepted in exchange for goods)
2. Measure of value (the price of a good reveals it’s value)
3. A method of deferred payment (allows for debt to be created)
4. A store of value (value is maintained and can be kept for a long time)