Unit 1 - 1 Flashcards
Advantages of Specialisation
- Concentrate on what they’re best at = increased efficiency
- Increased quantity of goods and services
- Increased quality of goods and services
- Internationally = increased SoL
Disadvantages of Specialisation
- Changing consumer tastes
- Output may be disrupted (bananas in the weather)
- If good is essential - can put some countries in powerful position in terms of trade
- The materials may run out (coal in the UK)
What is Productivity?
The amount of output that can be produced from a given input of resources
How is productivity calculated?
Output/Input
What is Specialisation?
The production of limited goods by an individual, firm or country in cooperation with another individual, firm or country to produce a whole range of goods.
How would you increase productivity?
- Substitution (replacement of labour with capital)
- Division of Labour
- Motivation techniques to workers
- Improved Training
What is Division of Labour?
Specialisation in the workplace by individuals
Advantages of Division of Labour
- Workers only need skills in few tasks = increased production
- Cost-effective as specialist tools can be provided to specific tasks
- More time as workers do not need to move around
Disadvantages of Division of Labour
- Work can become tedious as very repetitive = decreased motivation = decreased production
- More absentees likely
- Non-transferable skills, hard to find another job
Perfect Market Characteristics
- Does not exist in the real world
- Large number of firms - no firm is large enough to influence price - all firms are pricetakers (go by market price)
- Large number of buyers, no buyer is large enough to influence price
- Freedom of entry and exit to industry
- Perfect knowledge - all consumers and producers know they costs being charged by every producer so if one producer raises their price no one will buy
- Homogenous product - no differentiation, no branding, output of each firm identical
What is an Imperfect Market?
Any market that does not have any of the characteristics of a perfect market
What are the main types of Imperfect Market?
MONOPOLY
OLIGOPOLY
MONOPOLISTIC COMPETITION
MONPSONY
What is Monopsony?
- There is only one buyer
- The buyer can dictate the
- price
- product design
- delivery - Eg. Supermarkets and Fast Food