LS5 - Specialisation Flashcards
What is specialisation?
Specialisation occurs when an individual, firm, region, or countries concentrates on the production of a limited range of goods and services
Why does specialisation allow individuals to become more skilled?
Focusing on a single task means workers repeat these limited range and so become more skilled
What is the UK specialised in?
Banking, Insurance, Accounting Services
What is the division of labour?
The division of labour is the specialisation of workers on specific tasks in the production process
Why do firms benefit from the division of labour?
Workers become more efficient and produce at a higher quality as they are more specialised. By having better skilled workers, quality improves. By having multiple workers doing different things at once, multitasking is achieved improving efficiency
What is productivity?
Productivity is the effectiveness of productive effort - usually measures in terms of the rate of output per unit of input
Why does more capital increase labour?
More machinery means more labour is required to maintain the capital
What does increased productivity lead to?
Higher output and higher quality
Higher standard of living
More efficient use of resources
What are the advantages of the division of labour?
Workers become more skilled through the repetition of tasks
The productivity of workers rises so output increases
Time is saved by workers focussing on a narrow range of tasks
Workers are easier and cheaper to train
What is the overall benefit for a firm because of the division of labour?
There is a greater quantity and higher quality of output
What is the overall benefit for workers because of the division of labour?
For workers, they are trained to have higher skill levels and potentially higher wages
What are the disadvantages to the division of labour?
Repetition of tasks can lead to boredom thereby causing quality and morale to drop
Simplified job roles can reduce the price that workers feel in their jobs
What are the advantages of specialisation?
Better quality and higher quantity of products
More efficient use of scarce resources
Higher trade with other countries
Higher economic growth ==> Higher living standards
What are the disadvantages of specialisation?
Over-reliance on a few industries is risky as if they do not do well, the overall economy declines
Increased interdependency reduces self-sufficiency
What are the two methods of trading?
Barter is to exchange a good or service for a good or service
Money is to exchange a currency for a good or service
