Division of Labour Flashcards
Division of labour
when the production process is broken down into individual tasks
advantages of division of labour
-improved dexterity
-improved productivity
-reduced unit costs = higher profit
-higher quality final product
-no time wasted moving around
-workers find efficient alternatives
-less training required
disadvantages of division of Labour
-monotony of repetition reduces morale
-absenteeism disrupts the production process
-decline in quality due to boredom
-workers easily replaced by automation
-firms may have to pay higher wages
specialisation
a process whereby and individual, firm or country focuses its production on a limited scope of goods or services in order to achieve a greater degree of productive efficiency
specialisation results in…
-increased output
-higher incomes
-higher living standards
the benefits of specialisation depend on…
the use of money by means of exchange
division of labour requires an efficient means of exchange because…
specialist workers are not self sufficient
the extent of division of labour is determined by…
the size of the market
production
a measure of the value of the output of goods and services
productivity
a measure of the efficiency of the factors of production: output per unit of input over a specific period of time
factors affecting labour productivity
-advancements in production technology
-training to boost labour skills
-quality of the management in a business
-motivation or higher pay
labour productivity
the output per person per period of time
productive efficiency
the lowest cost per unit of output
Barter
the direct exchange of goods and services without the use of money as a medium of exchange
how did Adam Smith illustrate the benefits of division of labour
the allocation of tasks in a pin making factory, in the Wealth of Nations (1776)
