Specialisation and the Division of labour

Question 1

Who brought about the concepts of specialisation and the division of labour?

Answer 1

Adam Smith in (‘An Inquiry into the Nature and Causes of the) Wealth of Nations’ (1776).

Question 2

What is specialisation?

Answer 2

The production of a single or narrow range of goods by an individual, a business or a nation.

Question 3

What is the division of labour?

Answer 3

Specialisation by individuals.

Question 4

Why would one specialise?

Answer 4

individuals/firms/nations are able to produce one good more efficiently than if they tried to produce a wider range of goods.

Question 5

What are the advantages of specialisation to a country (4)?

Answer 5

1) A greater number of goods and services can be produced if different firms specialise in different areas.
2) Lower costs of production.
3) Encourages trade and partnerships between nations.
4) Leads to mass production, resulting in more needs being satisfied.

Question 6

What are the disadvantages of specialisation (3)?

Answer 6

1) Work can become repetitive and monotonous.
2) Can result in over-reliance on a certain industry.
3) Division of labour can result in interdependence - if one industry/group of workers strike, then a whole production chain can falter.

Question 7

What are the three sectors of the economy?

Answer 7

1) The primary sector involves the exploitation of natural resources. E.g. agricultural, mining, forestry.
2) The secondary sector involves the processing of raw materials. E.g. manufacturing and construction.
3) The tertiary sector involves services. E.g. education and finance.

Question 8

What is a market?

Answer 8

Any system where buyers and sellers come together to exchange goods and services.