Chapter 4 - Specialisation and the Division of Labour Flashcards
Define - “Barter”
Swapping one good for another without use of money.
Define - “Division of Labour”
Specialisation by workers, who perform different tasks at different stages of production.
Define - “Liquidity”
The ability to change an asset into cash. The more liquid the asset is, the easier it is to do this.
Define - “Labour Productivity”
Output per worker
Define - “Capital Productivity”
Output per unit of capital employed
Define - “illiquid”
Difficult to cover an asset into cash. Completely illiquid means it is impossible to do so.
Define - “Equity”
In a company it is the value of assets owned by the shareholders
State the Four Functions of Money
A medium of exchange, a measure of value, a store of value, a method of deferred payment.
Define - “Specialisation”
A system of organisation where economic units (such as households or nations) are not self-sufficient but concentrate of producing certain goods and services and trading surplus with others.
Define - “Money Substitutes”
Anything that can be used as a medium of exchange but are not stores of value. Examples are charge cards or credit cards.
Define - “Private sector”
The part of an economy owned by individuals or charities
Define - “Public sector”
The part of an economy where production is organised by the state or the government.
Define - “Retail Banks”
Banks that provide services to individuals
Define - “Self-sufficiency”
Being able to provide all the things you need without help from other people
Define - “Sun-Market”
A market that is distinct and identifiable part of a larger market.
