Specialisation And Division Of Labour

Question 1

What is division of labour?

Answer 1

Division of labour occurs when the work is split up into small, specialised tasks.

Question 2

Who was Adam smith and what did he suggest?

Answer 2

In The Wealth of Nations Adam Smith set out the view that economic growth could be achieved by increasing the division of labour. It saves time and enables each worker to become an expert in one specific task, so increasing their productivity.

Question 3

How might a firm benefit from the division of labour?

Answer 3

Increased profit because the division of labour would increase productivity and reduce costs.

Question 4

What are the advantages of specialisation and the division of labour in organising production?

Answer 4

1. Each worker specialises in tasks for which that worker is best suited.
2. The worker only has to be trained in one task. Therefore, training costs for the firm are likely to be lower.
3. Less time is wasted because a worker no longer has to move from one task to another.
4. In manufacturing, such an approach enables production line methods to be employed and allows an increased use of machinery. In turn, this helps to increase productivity and to reduce average costs of production.

Question 5

What are the disadvantages of specialisation and division of labour in organising production?

Answer 5

1. Monotony and boredom for workers: this could result in a decrease in productivity.
2. Loss of skills: workers trained in one particular task have only limited skills. This could be a problem if they are made redundant
3. A strike by one group of workers could bring the entire production facility to a standstill.
4. There is a lack of variety because all goods produced on a production line are identical.

Question 6

What are the advantages and disadvantages of specialising in the production of goods and services to trade?

Answer 6

Advantages
If a country specialises in the production of certain goods and services and then trades these in exchange for goods and services that it does not produce, then it can benefit from increased output, greater choice and lower prices.

Disadvantages
Such specialisation might mean that a country becomes over-dependent on imported goods and services. If its goods and services are uncompetitive then unemployment could result, and the country’s value of imports may persistently exceed the value of its exports.

Question 7

What are the limits to the division of labour?

Answer 7

✚ The size of the market: if there is only a small market then it is more difficult to specialise.

✚ The type of product: for example ,designer fashion products are likely to be
unique and not suitable for the division of labour.

✚ Transport costs: if these are high then large-scale production and the division of labour may not be possible.

Question 8

What is the definition of money?

Answer 8

Money refers to anything that is used as a means of exchange for goods and services.

Question 9

What are the functions of money?

Answer 9

✚ As a medium of exchange enabling people tospecialise,exchangingthe
money earned from doing a specialist job for the goods and services they
wish to buy.
✚ Astoreofvalueenablingpeopletosaveinordertobuygoodsinthefuture.
✚ Ameasureofvalueenablingpeopletoassessthevalueofdifferentgoods
and services by comparing prices.
✚ Ameansofdeferredpaymentsenablingpeopletobuygoodsandpayfor
them on credit.

Question 10

What is specialisation?

Answer 10

Specialisation occurs when an individual, firm, region or countries concentrates on the production of a limited range of goods and services