1.1.5 Specialisation and division of labour

Question 1

Specialisation

Answer 1

-Concentration of firms/nations producing a limited range of goods
-tasks are divided among workers

-Adam Smith - specialisation leads to increased productivity and economic growth

Question 2

Advantages and disadvantages of specialisation and the division of labour

Answer 2

Advantages:
-Increased productivity - more skilled in specific tasks leading to higher efficiency
-Economies of scale- larger quantities of goods can be produced more efficiently
-Lower costs -reduced training time and waste - cost savings

Disadvantages:
-Monotony - job dissatisfaction
-Dependency - vulnerable to economic shocks

Question 3

Ad/Disad of specialisation in g+s for trade

Answer 3

-Comapritive advantage - higher efficiency
-Improved standard of living - access to wider variety of goods

-Vulnerability to shocks
-Income inequality - benefit certain regions or industries more

Question 4

Functions of money

Answer 4

Medium of exchange
-eliminates need for barter
-used for current purchases/debt

Measure of value
-Unit of account/ common measure
-easy to compare value of different goods

Store of value
-saved/stored for future use and preserve its value over time

Method of deferred payment
-Payment may occur at later date
-Credit