Specialisation and the division of labour

Question 1

Specialisation

Answer 1

A system of organisation where economic units such as households or nations are not self-sufficient but concentrate on producing certain goods

Question 2

Division of labour

Answer 2

Specialisation by workers, who perform different tasks at different stages of production to make a good or service, in co-operation with other workers.

Question 3

Productivity

Answer 3

Output per unit of input

Question 4

Labour productivity

Answer 4

Output per worker.

Question 5

Capital productivity

Answer 5

Output per unit of capital employed.

Question 6

Increase in productivity arises from…

Answer 6

An increase in labour productivity and capital productivity

Question 7

Advantages of specialisation

Answer 7

• workers gain skills in a narrow range of tasks - individual workers are more productive than if they did all the tasks.
• Division of labour - cost effective to provide workers with special tools
• Time is saved - workers are not constantly changing tasks, locations or machinery and tools
• Workers can specialise in those tasks which they are best suited.

Question 8

Disadvantages of specialisation (2)

Answer 8

• Repetition of the same task can become tedious and monotonous
• Workers feel alienated from their work - results in poorer quality of work and less output per person

Question 9

Primary sector

Answer 9

Extractive and agricultural industries

Question 10

Secondary or manufacturing sector

Answer 10

Industries involved in production of goods mainly manufactured goods.

Question 11

Tertiary or service sector

Answer 11

Industries involved in production of services

Question 12

Public sector

Answer 12

The part of the economy where production is organised by the state or the government.

Question 13

Market

Answer 13

Any convenient set of arrangements by which buyers and sellers communicate to exchange goods and services.

Question 14

Sub-market

Answer 14

A market which is a distinct and identifiable part of a larger market.

Question 15

What has specialisation done for individuals?

Answer 15

Has enabled people to enjoy a standard of living which would be impossible to achieve through self-sufficiency.

Question 16

Money

Answer 16

Any item, such as a coin or a bank balance, which fulfils four functions:
a medium of exchange
a measure of value
a store of value
a method of deferred payment

Question 17

Barter

Answer 17

Swapping one good for another without the use of money.

Question 18

Measure of value

Answer 18

A function of money where it can be used to judge the value of a good or service.

Question 19

Medium of exchange

Answer 19

Money is any asset that is widely acceptable as a medium of exchange when buying goods and services in markets. It facilitates transactions between buyer and seller.

Question 20

Method of deferred payment

Answer 20

A function of money that allows a system of making payments at a later date.

Question 21

Store of value

Answer 21

A function of money in that it can be used to save and be exchanged at a later time.

Question 22

Unit of account

Answer 22

A function of money, a nominal unit of measure or currency used to value/cost products, assets (e.g. houses), debts, incomes and spending.