Specialisation, Etc. Flashcards
List the 5 disadvantages of specialisation
- boredom
- high labour turnover
- risk of structural unemployment
- reliance on a narrow range of products
- limited market size
What six roles most money fulfill?
- Standard for deferred payment
- store of value
- unit of account
- medium of exchange
- double coincidence on wants
- market economy
What is standard for deferred payment?
Arrange to pay for a good today for the future.
What is store of value?
Does not lose it’s value for future payments.
What is unit of account?
Allow the value of goods and services and avoid the double coincidence of wants.
What is double coincidence of wants?
Problem with barter economy consumers need to find someone who wants what they have and vice versa.
What is medium of exchange?
Used to exchange goods, services, and avoid double coincidence of wants.
What is market economy?
Market forces of supply and demand are allowed to guide the allocation of resources.
What is a barter system?
System where you trade item for item.
What is absolute advantage?
Where one business or country is able to produce more of a good or service with the same amount of resources, such that the unit cost of production is lower.
What is comparative advantage?
When one business produces a good or service at a lower relative opportunity cost.
What is the calculation for opportunity cost?
(Δ in opp. Cost/ Δ in extra production)
List the 6 advantages of specialisation
- increased productivity
- improved quality/reduced waste
- lower prices for consumers
- increased output
- move innovation
- less time wasted
define specialisation
Occurs when individual workers concentrate on a particular task within the production process.
define the division of labour
each task performed by a separate person or group of persons.
