1.1.5 Specialisation and Division of Labour

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1.1.5 Specialisation and Division of Labour

Advantages

  • People can specialise in the things they are best at (practice makes perfect)
  • Better quality and quantity of products for the same amount of effort overall
  • Firms can achieve economies of scale
  • More efficient production tackling the problem of scarcity, because if resources are used more efficiently, more output can be produced oer unit of input.
  • Training costs are reduced if workers are only trained to perform certain tasks.

Disadvantages

  • Repetitive - boredom
  • Countries can become less self-sufficient - this can be a problem if trade is disrupted for whatever reason. Eg. war or dispute.
  • Lack of flexibility - structural unemployment. Eg, UK coal mining left workers redunant and with no transferrable skills.

Evaluation

Overall, an economy can produce more goods if they specialise due to comparative and absolute advantages. Specialisation also leads to more trade due to it being cheaper to import certain goods than to manufacture them in their domestic economies. This leads to a balance of payments surpluses for economies with a large percentage of exports.

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