1.1.5 Specialisation And The Division Of Labour ✅

Question 1

Who was Adam smith and what did he talk about?

Answer 1

The father of economics and talked about increase in wealth and productivity.

Question 2

What is division of labour?

Answer 2

Type of specialisation where production is split into tasks which are allocated to people. (Increases productivity). Higher output per worker.
As people gain significant skill in their task.

Question 3

Where did Adam smith come up with this idea?

Answer 3

Observation while visiting a pin factory.

Question 4

What are some advantages of specialisation/division of labour in organising production?

Answer 4

• higher productivity/efficiency (output per person).
• training cost reduced (higher profits).

Question 5

What are some disadvantages of specialisation/division of labour in organising production? How can this be solved?

Answer 5

• work can become tedious / monotonous.
• this can lead to poorer quality (less output per hour).
• workers are not flexible

Targeting workers to where they are best suited.

Question 6

Advantages of specialisation/division of labour to trade?

Answer 6

• higher productivity thus lower costs per unit meaning it will be more competitive internationally.
• Increased export means economic growth.
• improved quality of goods makes them more desirable internationally.
• better variety of goods (income from exports used to by imports).

Question 7

Disadvantages of specialisation/division of labour to trade?

Answer 7

• regional unemployment (structural unemployment effects local areas of an economy). Due to an industry closing.
• breakdown in production process can cause chaos. (Toyota 1997).
• countries become less self-sufficient (struggle when trade suffers).

Question 8

What is an apposing system to money?

Answer 8

Barter (trading one good for another).
- need double coincidence of wants.
- harder to create future contracts (goods can perish).

Question 9

What are the 4 functions of money? Explain each?

Answer 9

• medium of exchange. (Intermediary between buyer and seller).
• store of value. (Due to it being stable - most of the time).
• measure of value. (Can be used to value goods).
• standard of differed payment. (can allow future agreements as it is physically long-lasting).

Question 10

What is commodity money?

Answer 10

Moneys who’s value comes from a commodity which is made.