Specialisation and the Division of Labour

Question 1

When doe specialization occur?

Answer 1

when workers are assigned specific tasks within a production process.

Question 2

What are the outcomes of Specialisation?

Answer 2

• Worker require less training to be an efficient worker
• Increases labour productivity
• Firms can benefit from Economies of Scale (Lower average costs with increased efficientcy)

Question 3

Examples of Specialisation within a car company.

Answer 3

• Some workers will design the cars

• Some will work on testing cars
• Some will work on marketing.

Question 4

What does specialisation mean for a country?

Answer 4

• They can produce goods that they are best at producing an exchange them with other countries.

Question 5

What advantages can specialisation have on a country?

Answer 5

• Trade with other countries can solve the problem of scarcity.
• Enables the country to push its PPF curve outwards.

Question 6

What does increased trade cause?

Answer 6

Increased Competition

Question 7

What are the problems of specialisation in production?

Answer 7

• If workers do specific tasks, it may become boring and their productivity may fall as a result. High levels of specialisation could lead to possible diseconomies of scale.
• If an assembly line becomes highly specialised, production could be brought to a halt if there is a blockage in one area.

Question 8

Problems of Specialisation in Trade.

Answer 8

• In terms of trade, poor countries may be encouraged to use up their non-renewable resources to sell to developing countries, therefore in the long term we could run out of non-renewable resources.
• Over specialisation in one country can lead to countries becoming over dependent on one particular commodity, e.g. if a developing country specialises in the production of a primary product their income may be adversely effected by bad weather conditions. Some primary products have quite a low income elasticity of demand. Therefore, they don’t benefit as much from economic growth.
• Critics of free trade argue that with increased specialisation there will be intense competition to cut costs and therefore wages will have to fall. However, this point is not necessarily true because firms can compete by producing capital-intensive goods with better technology