Specialisation, division of labour and exchange

Question 1

what is meant by the term ‘specialisation’?

Answer 1

When an individual, firm or country produces a narrow range of goods or services and over time develops a comparative cost advantage in producing these goods and services.

Question 2

How can specialisation improve productivity?

Answer 2

Allows specific tasks to be fulfilled by separate people, which increases overall production speed. More output per resource.

Question 3

What are some benefits of specialising?

Answer 3

Quicker output, less wastage of materials, lower unit cost, workers develop greater skills= quality can improve

Question 4

Drawbacks of specialising

Answer 4

Inconsistent speeds in production line, inflexible workers, monotony could lead to having being paid more, and training cost