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Benefits for producers, Benefits for countries, Costs for producers,…
Benefits for producers
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Bigger market
If all producers specialise, there are more buyers for each producer
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Benefits for countries
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More jobs
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These jobs require skilled labour, leading to higher incomes
International trade
If a country specialises, it will no longer produce some goods that are wanted, but will have a surplus of specialist products
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Government revenue
Increase in output, income and trade will lead to greater revenue from taxes for the gorvernment
Can lead if improved living standards as more/better schools, hospitals, etc are provided
Costs for producers
Movement of workers
Workers may become bored and leave (labour turnover), so new workers have to be recruited and trained
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UK employee turnover rate is 12% a year, this change is high test in areas such as: retailing, hotels, catering and leisure
Costs rising
As output increases, costs may rise
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Benefits for workers
Increased skill
By specialising, workers are more skilful/knowledgeable about their work
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Costs for countries
Unemployment
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As specialisation changes, workers in the declining industry may not be able to find new jobs because they lack the skills
Over-dependence
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If world demand changes, these industries and the country’s economy may collapse
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Costs for workers
Unemployment
If there’s a fall in demand for particular products, workers can find it difficult to get another job because they don’t have as many skills
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Deskilling
By specialising, workers lose the skills to do others types of work and are less able to respond to changes in demand
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Costs for regions
Risk of fall in demand
If demand falls (changes in taste/fashion), the industry will collapse/shrink leading to resource wastage
Resource exhaustion
If raw materials are no longer available, those employed in the industry will become unemployed, e.g. coal mining in the northeast
Loss of advantage
Another region/country may become better at producing the good, leading to resource wastage and unemployment