Specialisation and the division of labour Flashcards
Define specialisation
When economic units concentrate on producing specific goods or services
Define division of labour
The specialised use of workers within an organisation
List 2 advantages of specialisation
- Can lead to increased output per worker
- Greater supply of goods and services
List 4 advantages of specialisation and the division of labour in organising production
- Can lead to greater quality
- Can lead to increased efficiency
- Can reduce costs
- Can increase the speed and accuracy of work
List 4 disadvantages of specialisation and the division of labour in organising production
- Work can become monotonous
- Small firms cannot afford to introduce specialisation
- Risk of structural unemployment
- Reduces flexibility of the workforce
List 4 advantages of specialisation to trade
- Interdependence can lead to greater relations between countries
- Greater choice for consumers
- Improved national income
- Allows for trade
List 5 disadvantages of specialisation to trade
- Over-reliance on a limited number of industries
- Risk of structural unemployment
- Reliance on other nations
- Threat of external factors
- Less developed countries may be discouraged from moving into new industries
what is the disadvantage of a country specialising?
The country might experience some difficulty if the price of the product it is specialising in falls relative to other goods or if there is a global disruption of trade
Define Barter
Barter occurs when goods and services are exchanged for other goods and services between two parties
Define double coincidence of wants
All parties need to accept what is being offered
What is the disadvantage of the barter system?
There needs to be a double coincidence of wants
What is money?
Money is something that is acceptable to both buyers and sellers
What are the functions of money?
- A medium of exchange
- A store of value
- A unit of account
- A standard of deferred payment
