Role of markets 2 Flashcards
1
Q
What is specialisation?
A
The process by which individuals, firms, regions and whole economies
concentrate on producing those products that they are best at producing
(gain an advantage). This then improves efficiency and increases output.
It also often means firms have to give up producing other goods and
services to do so. Firms then have to rely on exchange in order to gain all
the products and services it needs
2
Q
What is exchange?
A
Involves giving up something the individual or firm has, in return for
something they need, but do not possess
(originally done by bartering
but today we usually use money)
3
Q
What are the benefits of specialisation and exchange for PRODUCERS? https://classroom.google.com /c/MjIwNzQ1NDczOTYz/m/NDE 0ODUzNTAwOTM1/details
A
benefits
- higher output
- higher productivity
- higher quality
- bigger market
- economies of scale
- time saving
costs
- as output increases costs may rise as resources may be in shorter supply
- dependency
- failure of exchange
- movement of workers
4
Q
What are the benefits of specialisation and exchange for WORKERS? https://classroom.google.com /c/MjIwNzQ1NDczOTYz/m/NDE 0ODUzNTAwOTM1/details
A
BENEFITS
- increased skill->money
- can specialise in natural strengths
- increased job satisfaction
- increased soL
COSTS
- boredom
- deskilling
- unemployment
5
Q
What are the benefits of specialisation and exchange for COUNTRIES? https://classroom.google.com /c/MjIwNzQ1NDczOTYz/m/NDE 0ODUzNTAwOTM1/details
A
BENEFITS
- economies of scale + efficiency
- more jobs
- International trade
- improved soL
- increased government revenue
COSTS
- unemployment
- overdependence
- over exploitation of resources
- negative externalities
6
Q
What are the benefits of specialisation and exchange for REGIONs? https://classroom.google.com /c/MjIwNzQ1NDczOTYz/m/NDE 0ODUzNTAwOTM1/details
A
BENEFITS -efficient use of resources -creates jobs for residents -infrastructure development COSTS -risk of fall in demand -resource exhaustion -loss of advantage eg.other regions may be better
