specialisation and division of labour

Question 1

Examples of specialisation and division of labour

Answer 1

Examples of specialisation and division of labour

Question 2

Problems of specialisation in production

Answer 2

Firstly if workers do specific tasks, it may become boring and their productivity may fall as a result. High levels of specialisation could lead to possible diseconomies of scale.
If an assembly line becomes highly specialised, production could be brought to a halt if there is a blockage in one area. It can be beneficial if there are more people specialised in different aspects.

Question 3

Problems of specialisation in trade

Answer 3

In terms of trade, poor countries may be encouraged to use up their non-renewable resources to sell to developing countries, therefore in the long term we could run out of non-renewable resources.
Over specialisation in one country can lead to countries becoming over dependent on one particular commodity, e.g. if a developing country specialises in the production of a primary product their income may be adversely effected by bad weather conditions. Some primary products have quite a low income elasticity of demand. Therefore, they don’t benefit as much from economic growth.
Critics of free trade argue that with increased specialisation there will be intense competition to cut costs and therefore wages will have to fall. However, this point is not necessarily true because firms can compete by producing capital-intensive goods with better technology.