Specialisation

Question 1

Specialisation

Answer 1

Specialisation: When firms, individuals or countries concentrate on the production of one good or task

• Enables better use of resouces, allowing finite resouces to meet more unlimited wants

2 Types of Specialisation:
- By Product: Focus on 1 product, e.g cars/TVs
- By Process: Focus on 1 part of production process, e.g making car wheels, engines etc.

Question 2

Division of Labour

Answer 2

Division of Labour: Production process is broken down into seperate tasks
- E.g production of car broken down into wheels, engines, windows

Question 3

Adv & Disadv of Specialisation

Answer 3

Individual:
Advantages:
- Increased productvity, higher wages/ salary
- Makes you higher demand for companies
- Increase job satisfaction

Disadvantages:
- Causes dependency on a skill
- Risk of automation
- Becomes boring over time, sastisfaction falls

Firms:
Advantages:
- Increased rev, able to charge higher for better quality products
- Costs will fall as more productive, employ less, staff retention higher, less training
- Increase market power, outcompete rivals

Disadvantages
- Become reliant, could halt production (e.g strikes)
- Have to pay higher wages to skilled workers
- Vunerable to changes in consumer demand