Micro-Measuring economic performance: Specialisation

Question 1

What is specialisation?

Answer 1

The concentration of production on a narrow range of goods and services in a country/Regions/firms/workers. Focusing attention on producing a certain good/service

Question 2

What are the benefits of specialisation?

Answer 2

1. High output/ maximising output- increase trade and growth
2. A wider range of goods/services
3. Greater allocative efficiency
4. Higher productivity through better use of works
5. Quality improvements

Question 3

Explain the benefits/consequences of higher output

Answer 3

-resources are purely focused on efficient production
-inefficient production will stop diverting the resources to efficient production
-trade ( mutually beneficial) will increase as a country will need to import what they aren’t efficient production in producing and export what they aren’t efficient in producing.= good allocation of resources & max output-> export revenue increases-> GDP increases-> income increases

Question 4

Explain the benefits of a wider range of goods and services

Answer 4

Dyson within narrow focues they can have a wide range within their focus

Question 5

Explain the benefits of greater allocative efficiency

Answer 5

overcome the problem of scarcity as resources will go to the most efficient place and be diverted to the less efficient place=> maxing output satisfying as much consumer demand a possible

Question 6

Explain the benefits of higher productivity of workers

Answer 6

-works are used better/ to their max productive potential.
- This decreases the cost of production to firms

Question 7

What are the disadvantages of specialisation?

Answer 7

1. Finite resources
2. Changes in fashion/tastes
3. De-industrialisttion
4. National interdependence

Question 8

Explain the disadvantages of finite resources

Answer 8

company/country which are overspecialized and requires a certain input e.g crude oil if oil is depleted the company could go under

Question 9

Explain the disadvantages of changes in fashion/trends

Answer 9

Over-specialised businesses which haven’t diversified may be in danger if a consumer moves away from their product

Question 10

Explain the disadvantages of de-industrialisation

Answer 10

Foreign countries/firms become more efficient than other industries abroad the other less efficient industries will decline increasing unemployment

Question 11

Explain the negatives of attentional interdependence

Answer 11

• If there isn’t mutually beneficial trade a country cannot export the surplus which they are effect t at and import what they aren’t efficient at producing
  -trade may be blocked due to international relations issues