2.1 - specialisation / trade Flashcards
Specialisation and trade
Meaning of specialisation
The concentration by a worker, group, firm, region or whole economy on a narrow range of goods and services
Advantages of specialisation
Higher productivity and efficiency
Lower unit cost = higher profit
Economies of scale
Disadvantages of specialisation
Risk of worker alienation
Risk of disruption to productive process
Risk of structural unemployment due to occupational immobility
Division of labour definition
A business has employees focusing on one small part of a product.
Workers specialise
Advantages of the Division of Labour
Productivity increases
Little training needed
Low-skilled workers become efficient
Cheaper labour can be hired
Production can be mechanised easier
Less tools
Disadvantages of the Division of Labour
Workers can become alienated
Motivation can be poor (repetition)
Quality may suffer
Mass produced goods may lack variety
Structural unemployment
Barter definition
A type of trade in which goods and services are directly swapped for other goods + services without money.
Strengths of barter systems
Builds relationships with others
Useful in times of economic crisis
Weaknesses of barter systems
Time consuming
Hard to valuate goods and services
Money is a medium of exchange meaning
Money is a way of obtaining what you need to live without needing to specialise in an area.
Addressing scarcity
More production
Firms can achieve economies of scale
Higher efficiency
Increased competition
