1.1.5 Specialisation And The Division Of Labour

Question 1

Adam Smith (division of labour)

Answer 1

• The Wealth of Nations in 18th century
• In a pin factory, he found that when workers produced each pin individually = low output
• Splitting the production into different tasks & allocating each = more output & greater skill = less wastage of materials & less time & lower costs

Question 2

Henry Force (division of labour)

Answer 2

Early 20th Century, workers became so bored that they had to be paid high wages as compensation for the monotony of their work

Question 3

Advantages of division of labour

Answer 3

• higher productivity
• greater skill
• less time
• high output
• less wastage of materials/lower costs

Question 4

Disadvantages of division of labour

Answer 4

• lower productivity
• boredom
• lower output
• higher costs

Question 5

Function of money

Answer 5

• a medium of exchange
• a measure of value/unit of account
• store of value
• a method of deferred payment

Question 6

Function of money (medium of exchange)

Answer 6

Money acts an an intermediary between the buyer & seller (instead of exchanging g/s)

Question 7

Function of money (a measure of value/unit of account)

Answer 7

It’s a ruler by which other values are measured (acts as a common denominator)

Question 8

Function of money (store of a value)

Answer 8

If we trade shoes for services, shoes go out of style or apples will go bad (their value will decrease with each season)

Question 9

Function of money (a method of deferred payment)

Answer 9

Money is also acceptable to make purchases today that will be paid in the future (loans)