1.1.5 Specialisation and the Division of Labour

• Consumer Sovereignty


  Individuals choose what to buy and influence what is produced
• Specialisation


  A method of production where a business or area focuses on the production of a limited scope of products or services to gain greater productive efficiency.
• Alienation


  Workers feeling estranged from their work likely due to the division and specialisation of labour
• Rationing


  Allocating scarce goods and services when demand exceeds supply. This can be by price, income, need, education/age, gender or nationality
• Benefits of Specialisation

  -Increased productivity of labour

  -Higher quality goods/services

  -Developing specialist tools is more cost-efficient

  -Increased time efficiency

  -Workers only need to be trained for one role
• Limitations of Specialisation


  -Deskilling leads to structural unemployment

  -Workers get bored so high turnover rates and low quality work

  -Delays impact the entire production chain

  -Reduction in craftmanship
• Money as a Medium of Exchange


  Solves the problem of bartering as it can buy goods and services everywhere
• Money as a Measure of Value


  Can be used to compare the value of goods and label the value of labour
• Money as a Store of Value


  Keeps its value for a long time
• Money as a Method of Deferred Payment

  Allows for debts to be created as people can pay for things later since money maintains its value