2.1 The role of markets Flashcards
Benefits of specialisation for workers
- Increased skill, greater pay
- Increased standard of living
- Increased job satisfaction
Define production of services
The process of providing a service to a consumer
Define production of goods
Involves using raw materials and/or semi-finished goods to make a whole good, commonly called manufacturing
Costs of specialisation for regions
- If demand falls, industry may collapse
- If resources run out, those employed in the industry become unemployed
- Loss of advantage as another region becomes better at producing, leading to unemployment
Define exchange
The giving up of something that an individual or firm has in return for something they wish to have, but do not possess
Define tertiary sector
All activities in an economy that involve the idea of a service
Benefits of specialisation for regions
- Creates jobs (near the area)
- Development of better infrastructure
- Region makes best use of resources
Define factor market
Where the services of the factors of production are bought and sold
Define secondary sector
All activities in an economy concerned with either manufacturing or construction
Benefits of specialisation for countries
- More jobs, increased government revenue (better schools, hospitals etc)
- Increased efficiency/output
- Increased international trade
Define primary sector
The direct use of natural resources including extraction of basic materials and goods from land and sea
Benefits of specialisation for producers
- Greater quality
- Greater productivity/output
- Economies of scale (larger output enables these to be gained)
Define product market
Where final goods and services are offered to consumers, businesses and the public sector
Costs of specialisation for workers
- Boredom
- Deskilling (unable to do different jobs)
- Unemployment (replaced by machinery)
Define specialisation
The process by which individuals, firms, regions and countries concentrate on producing what they are best at
Costs of specialisation for producers
- Movement of workers
- Diseconomies of scale (as output increases, costs may eventually rise)
- May not be able to buy necessary scarce resources
Define market
A way of bringing together buyers and sellers to buy and sell goods and services
Explain the interdependence between factor and product market
- In the factor market, households are the owners of factors of production, they sell these to firms
- In the product market, households are the main buyers of goods and services while firms are the sellers of
these goods and services
Costs of specialisation for countries
- Increased output, leading to over-exploiting resources so unsustainable development
- Negative externalities can lead to serious environmental damages
- As specialisation changes, workers in the declining industry become unemployed
