The Role of Markets Flashcards
Specialisation definition
the process by which individuals, firms, regions and countries concentrate on producing the products that they are best at doing
benefits of specialisation for producers
Higher output - total production of G+S and services is increased.
Higher productivity - As workers become more skilled
Higher quality - As the best factors can be employed
costs of specialisation for producers
Dependant on demand
Workers can become bored doing the same thing over and over again.
Costs of specialisation for the workers
Boredom - leading to demotivation
Deskilling - workers will be unable to do different jobs so are less able to respond to changes in demand.
Unemployment - If the product goes out of demand, they will be made redundant and could be replaced by machines
Benefits of specialisation for workers
Increased skill and output could lead to higher revenue.
Increased job satisfaction as they do what they are best at doing so they become motivated and satisfied.
Increased standard of living as a result of increase wages.
Benefits of specialisation for regions
A region makes best use of its resources
Creates job opportunities for residents near to home
Development of better infrastructure and supply industries.
Costs of specialisation for regions
If demand falls, the industry may collapse
If resources in the region run out, those employed in the industry will be made redundant.
Benefits of specialisation for countries
Greater efficiency and output to satisfy international trade
More jobs as increased sales can result in investment and job creation.
Increased income means better standard of living for citizens in that country.
Government revenue increases, which can be spent on public sector improvements.
Costs of specialisation for countries
If world demand changes, the economy may collapse.
As specialisation increases, workers in the declining economy become unemployed.
