Specialisation and the division of labour Flashcards
1
Q
which economist observed the division of labour in a pin factory?
A
Adam Smith
2
Q
what is specialisation?
A
the process where in a company or individual decides to focus their labour on a specific type of production
3
Q
how does the division of labour result in higher output?
A
division of labour can raise output per person as people become proficient through constant repetition of a task
4
Q
how might the division of labour result in higher quality?
A
- once labour has been divided, workers become specialized in a particular part of the production process because they repeat the task over and over
- division of labour is often useful because some people are better at certain tasks than others
5
Q
how might specialisation result in lower costs?
A
a company is able to reduce the price for its goods or services because it costs less to make their goods or provide their services
6
Q
give 4 disadvantages of specialisation in a firm
A
- increased boredom
- overreliance
- finite resources
- changing tastes
7
Q
explain each of the 5 functions of money
A
- Medium of exchange:
Money serves as a standard unit of account that facilitates transactions by allowing goods and services to be exchanged for a common and widely accepted medium of exchange - Unit of account:
Money serves as a standard unit of measurement for the value of goods, services, and financial assets, enabling individuals and businesses to compare prices and make informed decisions - Store of value:
Money allows individuals to save for future consumption by maintaining its purchasing power over time - Facilitates exchange:
By reducing the transaction costs and increasing the efficiency of exchanging goods and services, money helps to promote economic activity and growth - Standard of deferred payment:
Money enables individuals and businesses to make deferred payments, such as loans, mortgages, and insurance contracts, by providing a means of transferable credit
