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Economics (Topic 2.1 - The role of markets (Evaluating Specialization…

- - - - Disadvantages:
        
        Negative externalizes - Over-exploitation of resources and/or production can lead to serious environmental danger. This can lead to serious health problem and natural disasters.
        
        Over-exploitation of resources - Output may be increased by over-exploiting natural resources. This can lead to disappearing of some resources.
        
        Over-dependence - Countries can over-specialise and become dependent on one product or a very small number of products - If the world demand changes then these industries and the country's economy may collapse
        
        Unemployment - As specialisation changes, workers may lack necessary skills - Workers in the declining industry may not be able to find new jobs
      - Advantages:
        
        Economies of Scale - Countries will produce larger quantities of the products they are specialising in, making each unit cheaper to produce - This will make the products more affordable and attractive to other countries
        
        Government revenue - Government will take in more taxes from production and consumption of goods and services - This can lead to improved living standards as there are more or better schools, hospitals, etc. are provided.
        
        More jobs - Increasing production may result in more workers required - in some cases these jobs require skilled labour workers, leading to higher income
        
        Improved standard of living - There will be increased choice, income, output and infrastructure - This leads to better quality of life for most people
        
        International Trade - If a country specialises, it will no longer produce some goods that are wanted and will have a surplus of products they make - This leads to international trade and a greater choice of goods and services for its people
    - - Disadvantages:
        
        Boredom - Doing the same job every day may become boring - Workers may become unmotivated
        
        Unemployment - Fall in demand for a particular product or machines replacing labour may make workers redundant - Workers may find it difficult to get another job because they don't have the necessary experience
        
        Deskilling - Workers lose to skills to do other types of work - They are less able to respond to changes in requirements
      - Advantages:
        
        Increasing standard of living - As workers become skilled and motivated they will earn more - Workers can then buy more goods and services to satisfy their needs and wants
        
        Increasing job satisfaction - Allowing workers to do what they're good at is likely to improve their motivation and satisfaction
        
        Natural strengths - Workers are able to do what they are best at and don't have to do work they're not so good at - Can result in them earning more money
        
        Increased skill - Workers become more skilful in and knowledgeable about their work - Can result in them earning more money
    - - Disadvantages:
        
        Loss of advantage - Another region or country may become better at producing the good - This will lead to problems such as resource wastage and unemployment
        
        Resource exhaustion - If raw materials are no longer available - Those employed in the industry will become unemployed
        
        Risk of fall in demand - If demand falls due to changes in taste and fashion - The industry will collapse or shrink, leading to resource wastage
      - Advantages:
        
        Efficient use of resources - a region could specialise in a particular industry due to the availability of resources - It will be easier to use that resource efficiently
        
        Infrastructure Development - A region that specializes in a particular industry will develop both infrastructure and supply industries to support that industry. This will lead to further regional development
        
        Creates jobs for residents - The development of an industry in a particular region helps the residents of that area - The residents can find work near to their homes
    - - Disadvantages:
        
        Failure of exchange - It may be impossible to buy scarce resources or supplier may greatly increase prices - Producers may not be able to provide products to the marker
        
        Movement of workers - Workers may become bored and leave - New workers have to be recruited and trained
        
        Dependency - Production of goods and services depends on all parts working well - Problems such as technical failure and strike can lead to the whole process stopping
        
        Costs may rise at high output - Very high output and factory size could make it difficult to organise workers and resources may become scarce - Firms may lose time and quality and pay more for resources
      - Advantages:
        
        Time Saving - Workers don't need to stop between production of different products. This saves time and money.
        
        Economies of scale - As firms specialise they can produce more and grow in size - as they grow in size they can save on costs of production in various ways
        
        Bigger Market - If all producers specialize, then for each product there will be more buyers for each producer
        
        Higher Productivity - Workers who specialise in one task become very skilled - output per worker per hour increases
        
        Higher Quality - Workers become more skilled and firms can but components of their products from other firms who specialise - Workers can produce better products and components that are of higher quality
        
        Higher Output - In some areas it is possible to use automated or specialist equipment - total production of services will be increased
- - - - Quality of Life
      - Local issues e.g crime, accesibility
      - Fairness to all
      - Who pays (taxpayers) and benefits (specific groups)
    - - Pollution (air,water,noise) and climate change
      - Renewable and non-renewable resources
    - - Taxes
      - Jobs
      - Government spending
      - Financial cost
  - - - Choice - The next best alternative given up when making a choice
      - Opportunity Cost -The selection of appropriate alternatives
      - Resources - Materials used to produce goods and services
      - Want - Something you would like to have but it is not essential for survival
      - Need - Something essential to survival e.g. water, food