Specialisation

Question 1

Define specialisation

Answer 1

When individuals, firms, or countries concentrate on producing a narrow range of goods and services

Question 2

What are the requirements of specialisation?

Answer 2

Successful trade (a way of exchanging goods and services)
Money to help transactions

Question 3

What are the benefits of specialisation?

Answer 3

Larger range of goods and services (Dyson specialise in manufacturing vacuum cleaners but they have a wide range of vacuum cleaners)
Reduces the problem of scarcity (greater output)
Higher quality goods/services
Trade increases so economy grows

Question 4

What are the disadvantages to specialisation?

Answer 4

Finite resources
Over reliance on good weather
Changing tastes/fashions
National interdependence 
Deindustrialisation

Question 5

Define division of labour

Answer 5

Where a firm specialises in producing a good or service and the production process is broken down into separate tasks

Question 6

What are the advantages to division of labour?

Answer 6

Workers become more better/more skilled at their job
Productivity increases
Time saved
Capital used more efficiently
Consumers benefit from cheaper prices

Question 7

What are the disadvantages to division of labour?

Answer 7

Boredom, could lead to a lack of motivation and quality could suffer
Unskilled work, low pay
Poor working conditions
Over reliance on one job

Question 8

What’s the formula for labour productivity?

Answer 8

Total output in a given period of time/number of units of labour used

Question 9

What are the benefits to higher productivity?

Answer 9

Lower average costs of production
Higher profits
Economic growth