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Specialisation and the division of labour (Disadvantages of specialisation…
Specialisation and the division of labour
Factor market
Where factors of production are bought and sold
Land, labour, capital and enterprise
Product market
Firms sell goods and services to make profit
Where goods and services that are produced by firms are sold to households and firms
Specialisation
Specialisation occurs when producers focus on the production of particular products
Specialisation occurs when regions or countries focus their production on particular industries
Specialisation occurs where workers focus on a particular task
Division of labour
When specific tasks are allocated to each member of staff
Advantages of specialisation and the division of labour in organising productivity
Higher wages
Increase in output
Decrease average cost
Increase in supply
Increase in quality control
Disadvantages of specialisation and the division of labour in organising productivity
Lack of flexibility
Overspecialisation
Increase in average cost
Decrease in fall of output
Could be absenteeism
Demotivation
Labour turn over
Boredom
Specialisation in order to change
Advantages
Increase in exports and increase in demand
Increase in prices/inelastic demand
Employment opportunities
PPF shift outwards
Economic growth
Disadvantages
If there is competition
Low demand
High prices
Structural unemployment
Overspecialisation
Functions of money
Unit of account
Medium of exchange
Method of deferred payment
Store of wealth