Chapter 6- specialising

Question 1

What is specialisation?

Answer 1

This means that people make the most of their skills by concentrating their expertise in a particular field. As a skilled person produces more, output per head will rise and across the economy standards of living will improve.

Question 2

Division of labour

Answer 2

involves organising employees so that individuals specialise in one part of the production process. As they become quicker and more efficient, output increases.

Question 3

Efficiency

Answer 3

There are two aspects to efficiency. The first means you produce at a lower average cost (productive efficiency). Secondly, producing exactly what the country wants (allocative efficiency)