Specialisation and the Division of Labour

Question 1

What is Specialisation?

Answer 1

When firms, individuals, regions or countries concentrate on a particular product/task

Question 2

What are the advantages of Specialisation?

Answer 2

Productivity increased
Low cost
Speeds up production
Skills can be matched to particular task
Business will earn more - more can be spent on improving working conditions etc.
Exploitation of countries comparative advantage
Creates bigger markets to sell in

Question 3

What are the disadvantages of Specialisation?

Answer 3

Boring/Repetitive work
Workers not as motivated
Could mean Quality drops
Staff turnover could increase (they want to leave job)

Question 4

What is Division of Labour?

Answer 4

Specialisation by workers where the production of a good is broken up into many separate tasks each performed by one person

Question 5

What is Productivity?

Answer 5

Output per unit employed over a given time period

It is increased by Division of Labour

Question 6

What are the two types of Productivity?

Answer 6

Labour Productivity

Capital Productivity

Question 7

What is Labour Productivity?

Answer 7

Output per worker per time period (eg. 1 hour)

Question 8

What is Capital Productivity?

Answer 8

Output per unit of capital employed per time period

Question 9

What is Labour Productivity a measure of?

Answer 9

Business efficiency

Question 10

Why does Labour Productivity matter?

Answer 10

Costs lower, profit higher
Helps keep unit costs down to remain competitive
Labour costs usually major part of total costs
Linked to Business efficiency and profitability

Question 11

What are factors that influence how productive a workforce is?

Answer 11

Extent and quality of fixed assets (e.g. equipment, IT)
Skills, ability and motivation of workforce
Methods of production organisation
External Factors (e.g. reliability of suppliers)