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Production, costs and revenue (Productivity (The productivity of all…
Production, costs and revenue
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Productivity
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The productivity gap is the difference between labour and productivity in the UK and in other developed economies.
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Specialisation, division of labour and exchange
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Specilasation
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The idea of a worker only performing one or a narrow range of tasks that match there ability and training
Division of labour
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Divisions of labour work along side specialisation where different workers perform different tasks in the course of creating a good or service.
Trade and exchange
Before a national system of money the main system of trading was bartering with goods. However this requires a "double coincidence of wants" where by both parties want to sell and receive at an agreed rate of exchange
In order for specialisation to function effectively a system of trade and exchange is required this is because if you can only perform one small task you can live off what you produce your self. For example a black smith will need food and a farmer will need house shoes so they would arrange a trade deal.
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