LS 5

Question 1

What is specialisation?

Answer 1

The production of a limited range of goods by an individual firm or country.

Question 2

What is the division of labour?

Answer 2

Specialisation by individuals, in order to make workers do a specific jobs to increase productivity.

Question 3

What is productivity?

Answer 3

The output per unit of input employed

Question 4

How does specialisation and division of labour improve productivity?

Answer 4

• Specialisation produces just one good, therefore workers involved are more productive because they have a narrow range of tasks and become very productive.
• Division of Labour entails workers doing just one thing, therefore they become very efficient and productive.

Question 5

What problems does division labour cause?

Answer 5

Work can become tedious and monotonous which leads to poor quality output.

Question 6

What are the sectors of the economy?

Answer 6

Primary- raw material extraction (farming)
Secondary- manufacturing
Tertiary- service providers

Question 7

What two parts can the economy be broken into?

Answer 7

Public sector- state led economy

Private sector- privately owned part of the economy

Question 8

Why does specialisation necessitate trade?

Answer 8

Each firm or country produces one specific good or service but they need what the other firms and countries make, therefore necessitating trade.

Question 9

What are the functions of money?

Answer 9

A medium of exchange-(most important function)- when money is used to buy and sell goods.
A measure of value- gives G&S a worth so they can be compared.
A store of value- It retains value over time
A method of deferred payment- money can be lent and borrowed because it is a store of value.