MICRO - LS5 - Specialisation & The Division Of Labour

Question 1

What is specialisation

Answer 1

It occurs when an individual/firm/region or country concentrates on the production of a limited range of goods/services

Question 2

What does the UK specialise in

Answer 2

Banking/insurance/pharmaceuticals

Question 3

Advantages of specialisation

Answer 3

Better quality and quantity of products
Increased output
Efficient use of scarce resources
Higher trade with countries
Higher economic growth
Higher standards of living

Question 4

Disadvantages of specialisation

Answer 4

Over reliance on a few industries
Interdependence reduces self sufficiency causing disruption
Lack of flexibility - unable to adapt

Question 5

Example of interdependence

Answer 5

During covid couldn’t get chips for cars etc..

Question 6

Division of Labour definition

Answer 6

It’s the specialisation of workers on specific tasks in the production process - keep repeating the same ones

Question 7

Advantages of the division of Labour

Answer 7

- workers become more skilled through Repetition- specialise in what they are good at
- Productivity of workers increases - also output
- time is saved by workers focussing on narrow task range
- workers are cheaper and easier to train
- firms have greater quantity and quality of output
- workers have higher skill levels and potentially higher wages
- economies of scale - mass production (incl. assembly lines), larger quantities of identical goods can be produced more efficiently

Question 8

Disadvantages of the division of Labour

Answer 8

Repetition can lead to boredom causing quality and morale to drop
Simplified job roles can reduce pride workers feel - not developing skills/getting promotions
Dependency - overeliance on one work/task/factory makes units vulnerable to staff illness/economic shocks
Structural unemployment - workers trained in fewer skills, machines can replace some labour tasks
Lack of variety due to mass produced goods

Question 9

Productivity definition

Answer 9

It’s the effectivity of productive effort - measured usually in terms of the rate of output per rate of input

Question 10

Increased productivity leads to..

Answer 10

Higher output and quality
Higher standard of living
More efficient use of resources

Question 11

4 uses of money

Answer 11

Medium of exchange
Measure of value
Store of value
Method of deferred payment

Question 12

Medium of exchange

Answer 12

Something commonly accepted in exchange for goods/services

Question 13

Measure of value

Answer 13

Price of good reveals its value e.g. something costs £x

Question 14

Store of value

Answer 14

Value is maintained and can be kept for a long time

Question 15

Method of deferred payment

Answer 15

Accepted way to create and settle debt e.g. mortgage

Question 16

Adam Smith

Answer 16

He wrote about division of Labour in a book - wealth of nations (1776) - considered pin factory in Glasgow
Separating production into 18 parts would mean that 10 workers could make 48000 pins a day
Noted advantages and disadvantages like boredom
Argued that specialisation leads to increased productivity & economic growth in book

Question 17

Money & its characteristics

Answer 17

• Anything generally accepted in payment of debt, removes need to barter, avoids double coincidence of wants
• acceptable to all, portable, durable, easily divisible, uncounterfeitable, scarce in supply