Specialisation, Divisions of labour and exchange

Question 1

Specialisation

Answer 1

The concentration of production on a narrow range of goods and services. Could be economies, workers or firms that are specialising

Question 2

Specialisation benefits

Answer 2

Higher output (more choice for consumers)
Better quality of goods
Higher productivity (workers used to max output, lower COP)

Question 3

Specialisation drawbacks

Answer 3

Changes in trends could move demand away from firms (higher unemployment, lower profits)

Could use up more finite resources (may limit future production)

Question 4

Division of labour

Answer 4

Breaking down the production process into separate tasks upon/after specialisation. Firms divide up a workforce into specific production lines.

Question 5

Example: Production process of a garment making company

Answer 5

nput e.g. sewing, labour machinery, capital
Transformation process e.g. cutting, marking, stitching
Output e.g. Final cloth or garment

Question 6

Division of labour benefits

Answer 6

Workers are more productive (doing same thing day in and out which saves time)
Less training needed for workers (only have to master a small number of tasks)
Lower prices passed onto customers

Question 7

Division of labour drawbacks

Answer 7

Workers may become demotivated as jobs are repetitive and boring
Workers are at risk of long term structural unemployment if they lose their job and are very specialised
Highly standardised products so the unique touch is lost