Specialisation is when an individual, organisation or country specialise in the production of a good or service. Countries specialise in a product, commodity or service due to finate resources, efficiency and trade.

Benefits of Specialisation

  • Can create a more efficient production process
  • Less wastage of finate resources
  • Encourages trade between different economies

Drawbacks of Specialisation

  • Tasks can become boring which can lead to mistakes
  • Overdependant on one good, which can lead to less commodity if prices fall, demand is less or resources run out

Division of Labour - This is specialisation on an individual level where the production process is broken down into small parts.

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Objectives of Economic Agents and Maximisation

Households (us) - demand goods and services

Firms - exist to produce output of goods and services

Government - fulfils several roles in society. It undertakes expenditure and influences the economy through taxation and regulation of markets

Maximisation - is the process which underpins much of economic analysis. Research as suggested that economic agents do not always act rationally by using maximising behaviour

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