Theme 4 (1)
- Created by: LukeKeogh
- Created on: 03-05-19 08:58
View mindmap
- Theme 4
- Indications of growth
- GDP will rise as total output rises in accordance to the economic growth
- HDI will improve as all factors are improving (life expectancy, education and gross national income)
- Specialisation
- When a business focuses its production effort on one particular task or on one particular product
- Benefits
- Increased
productivity and output = reduced average costs and economies of scale
- The increased output leads to GDP growth
- Due to the reduction in costs, the business can lower their costs - can result in demand rising or their profits will rise due to the lower costs
- Increased
productivity and output = reduced average costs and economies of scale
- Cons
- Business might become overly reliant on one product
- Does not spread risk
- If the business grows too big it may suffer from diseconomies of scale through lack of communication and co-ordination
- Other business may copy and specialise in the same product
- Business might become overly reliant on one product
- Competitive advantage
- the idea that a business should specialise in any area where it can perform better than its competitors
- Comparative advantage
- the ability of a firm or individual to produce goods and/or services at a lower opportunity cost than other firms or individuals
- Foreign Direct Investment
- When a business in one country invests in a business in a separate country
- Indications of growth
Comments
No comments have yet been made