Specialisation, Division of labour and Exchange

Question 1

What is specialisation?

Answer 1

Specialisation is when individuals, firms or countries focus on the production of particular tasks, products or industries

Question 2

What is division of labour?

Answer 2

Division of labour is when the production process is divided into smaller parts and specific tasks are allocated to different members of staff

Question 3

What are the benefits of division of labour for firms?

Answer 3

• Increased productivity
• Higher output
• Lower unit cost (Economies of Scale)
• Higher quality
• Less waste (time and money)

Question 4

What are the costs of division of labour for firms?

Answer 4

• Unit cost may rise as resources become scarce
• Production depends on all parts working well (a small disruption can lead to whole process stopping)
• Workers may leave due to boredom

Question 5

What are the benefits of division of labour for workers?

Answer 5

• Increased skill
• Increased job satisfaction as they are able to do what they are good at
• Better wages due to higher productivity (more valuable)

Question 6

What are the costs of division of labour for workers?

Answer 6

• Boredom as repetitive tasks can cause demotivation
• Deskilling (losing other skills due to only doing one job)

Question 7

How and why do individuals and producers specialise?

Answer 7

In order for specialisation to occur, specific tasks will be assigned to different workers. This will cause them to become experts and will increase productivity