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Benefits for producers, Costs for Producers, Benefits for Workers, Costs…
Benefits for producers
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BIGGER MARKET:
if all producers specialise, then for each product there should be more buyers for each producer
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Costs for Producers
COSTS MAY EVENTUALLY RISE:
Resources may become shorter in supply or it takes more people to organise the workforce
DEPENDENCY:
Production depends on all parts working well. Problems such as a technical failure or a strike can lead to the whole process stopping
FAILURE OF EXCHANGE:
Exchange can fail if it is not possible to buy the scarce resources or components needed to produce, or if the supplier greatly increases the price or restricts production
MOVEMENT OF WORKERS:
Workers can become bored and leave (known as labour turnover), so new workers have to be recruited and trained. This can particularly affect low-skilled and low-paid work.
Benefits for Workers
Increased skill:
by specialising, workers become more skilful in and knowledge about their work. This can result in them earning more money
NATURAL STRENGTHS:
workers can do what they are best at and do not have to work they are not so good at. This should allow them to earn more
Increased job satisfaction:
allowing workers to do what they are good at is likely to improve their motivation and satisfaction at work
Increased Standard of Living:
by earning more money, workers can buy more goods to satisfy their needs and maybe their wants
Costs for Workers
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Deskilling:
By specialising, workers lose the skills to do other types of work and are less able to respond to changes in demand
Unemployment:
if there is a fall in demand for a particular product, workers may find it difficult to get another job because they do not have the necessary skills or experience. This may also occur because machines can replace their work
Benefits for Regions
Efficient use of resources:
a regions could specialise in a particular industry due to availability of resources, so it will be easier to use that resource efficiently
Creates jobs for residents:
the development of an industry in a particular region helps the residents of that area, since they can find work near to their homes
Infastructure Development:
a region that specialises in a particular industry will develop both infrastructure and supply industries to support that industry. This will lead to further regional development
Costs for Regions
Risk of Fall in Demand:
if demand falls due to changes in taste and fashion then the industry will collapse or shrink, leading to resource wastage
Resource Exhaustion:
if the raw materials are no longer available then those employed in the industry will become unemployed
Loss of Advantage:
another region or country may become better at producing the good, leading to the problems of resource wastage and unemployment
Benefits for countries
Economics of Scale and Efficiency:
Countries will specialise in what they do best, leading to greater efficiency and economics of scale. This increases the countries output
More jobs:
The increased output may result in more investment and job creation. In some cases these jobs require skilled labour, leading to higher incomes