Unit 1 - 1 Flashcards

1
Q

Advantages of Specialisation

A
  1. Concentrate on what they’re best at = increased efficiency
  2. Increased quantity of goods and services
  3. Increased quality of goods and services
  4. Internationally = increased SoL
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2
Q

Disadvantages of Specialisation

A
  1. Changing consumer tastes
  2. Output may be disrupted (bananas in the weather)
  3. If good is essential - can put some countries in powerful position in terms of trade
  4. The materials may run out (coal in the UK)
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3
Q

What is Productivity?

A

The amount of output that can be produced from a given input of resources

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4
Q

How is productivity calculated?

A

Output/Input

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5
Q

What is Specialisation?

A

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.

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6
Q

How would you increase productivity?

A
  1. Substitution (replacement of labour with capital)
  2. Division of Labour
  3. Motivation techniques to workers
  4. Improved Training
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7
Q

What is Division of Labour?

A

Specialisation in the workplace by individuals

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8
Q

Advantages of Division of Labour

A
  1. Workers only need skills in few tasks = increased production
  2. Cost-effective as specialist tools can be provided to specific tasks
  3. More time as workers do not need to move around
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9
Q

Disadvantages of Division of Labour

A
  1. Work can become tedious as very repetitive = decreased motivation = decreased production
  2. More absentees likely
  3. Non-transferable skills, hard to find another job
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10
Q

Perfect Market Characteristics

A
  1. Does not exist in the real world
  2. Large number of firms - no firm is large enough to influence price - all firms are pricetakers (go by market price)
  3. Large number of buyers, no buyer is large enough to influence price
  4. Freedom of entry and exit to industry
  5. 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
  6. Homogenous product - no differentiation, no branding, output of each firm identical
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11
Q

What is an Imperfect Market?

A

Any market that does not have any of the characteristics of a perfect market

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12
Q

What are the main types of Imperfect Market?

A

MONOPOLY
OLIGOPOLY
MONOPOLISTIC COMPETITION
MONPSONY

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13
Q

What is Monopsony?

A
  1. There is only one buyer
  2. The buyer can dictate the
    - price
    - product design
    - delivery
  3. Eg. Supermarkets and Fast Food
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