1.1.5 specialisation and division of labour questions

Question 1

define specialisation

Answer 1

when we concentrate our scarce resources on a specific product or task

Question 2

what are the gains from specialisation

Answer 2

• higher output
• greater variety of higher quality products
• a bigger market and economies of scale

Question 3

what are some potential drawbacks from specialisation

Answer 3

-structural unemployment arising from occupational immobility
-mass produced standardized goods may lack variety
- dangers from overspecialisation

Question 4

what is division of labour

Answer 4

the division of labour occurs where the production process is broken down into many separate tasks

Question 5

what are advantages of division of labour

Answer 5

• raise output per person
• the gain in labour productivity then helps to lower the supply cost per unit
• lower marker prices will lead to gains in economic welfare

Question 6

what are some potential drawbacks from the division of labour

Answer 6

repetitive work can lower and individuals motivation causing lower labour productivity
people switch to more attractive jobs creating high worker turnover and increased hiring/ training costs

Question 7

what are the main functions of money

Answer 7

1. a medium of exchange
   2.a store of value
   3.a unit of account
2. a standard of deferred payment

Question 8

what are the key characteristics of money

Answer 8

durability
portable
divisible
hard to counterfeit
accepted - legal tender
valuable

Question 9

what are the 4 sectors of economy and explain them

Answer 9

primary- extraction of raw materials / farming
secondary - manufacturing
tertiary -retail and services
quaternary-scientific research and development and IT

Question 10

what does barter mean

Answer 10

swapping one good for another without the use of money