Specialisation and division of labour

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  • Created by: emsvelho
  • Created on: 22-11-16 19:34
What is specialisation?
The process by which individuals, firms and economics concentrate on producing those goods and services in which they have an advantage
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What is the 'division of labour'?
The process whereby the production process is broken down into a sequence of tasks with workers assigned to particular tasks which they repeat
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What did Adam Smith say about the 'division of labour' in the 20th century?
He studied a pin factory and noticed that their output was only 20 pins per day. However, he suggested to split the process of production into a number of different tasks and by doing so, the production rose significantly to approximately 48,000 pins
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Positives about Adam Smith's pin factory study?
Increased output (48,000 a day), less wastage of materials and less time spent on a task
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What are some advantages of division of labour?
Lower cost per unit, increased output per worker, less time wasted, time & money saved in training
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Description of lower cost per unit?
Workers are more productive so less labour is needed to produce the same output / more output with existing labour force
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Increased output per worker?
Workers become more efficient in constant repetition of "learning by doing" which leads to lower cost per unit and lower prices for consumers
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Less time and money wasted
Less time is wasted in a worker moving from one job to another as they just remain in their specialised section. Also, time and money is saved in training workers as they only have to be trained in one section
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Disadvantages of 'division of labour'?
Monotony of work, chance of structural unemployment and greater interdependence
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Monotony of work?
Workers specialise in a task that may eventually become boring as they repeat the same thing which can lead to lower quality and increased staff turnover so businesses spend more to replace workers
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Chance of structural unemployment?
If production is broken down into different parts, workers may be replaced by machines and this sector of the economy may become structurally unemployed. They may need training if they don't have those certain skills in other jobs
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Greater interdependence and higher risk
By splitting production into separate parts, they each rely on each other so if one goes wrong, the entire process will break down which could impact a firm's productivity due to delays
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What is money?
Anything that is generally accepted in the payment of a good or deby
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What are the four functions of money?
Medium of exchange, measure of value, store of value and a method of deferred payment
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What is a store of value?
holds its value so it can be used at a later date which stores wealth for future purchases
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What is a measure of value
It allows a value to be placed on products so that they can be compared, often described as a unit of account which allows measurement
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What is a medium of exchange?
Enables the buying and selling of products and eliminates the need for a barter
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What is a method of deferred payment?
It enables the borrowing and lending, often with a charge (interest rate), which allows products to be bought without saving up the total cost before purchasing
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Card 2

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What is the 'division of labour'?

Back

The process whereby the production process is broken down into a sequence of tasks with workers assigned to particular tasks which they repeat

Card 3

Front

What did Adam Smith say about the 'division of labour' in the 20th century?

Back

Preview of the front of card 3

Card 4

Front

Positives about Adam Smith's pin factory study?

Back

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Card 5

Front

What are some advantages of division of labour?

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