Specilisation and trade

Question 1

What is Specialisation ?

Answer 1

The production of a limited range of goods by a company/country/individual so they aren’t self sufficient and have to trade with others

Question 2

What is division of labour?

Answer 2

When labour becomes specialised during the production process so workers carry out specific tasks

Question 3

What are some advantages of specialisation ?

Answer 3

Higher output, greater variety of goods, market increases

Question 4

What are some disadvantages of specialisation ?

Answer 4

Work becomes repetitive, more structural unemployment, Workers leave more regularly

Question 5

What is Comparative advantage ?

Answer 5

countries could produce a good at a lower opportunity cost

Question 6

What is A absolute advantage?

Answer 6

Occurs when a country produces more of a good with the same factor inputs

Question 7

What are the 4 functions of money ?

Answer 7

A medium of exchange, Measure of value, Store of value and a method of payment