2.1 Specialisation and Trdae

• Specialisation

  The production of a limited range of goods by a company/country/individual so they aren't self-sufficient and have to trade with others
• Division of labour

  When labour becomes specialised during the production process so workers carry out a specific task in cooperation with other workers
• Advantages of specialisation and division of labour

  1. Quicker production process

  2. Able to produce more goods and services

  3. Lower average cost of production
• Disadvantages of specialisation and division of labour

  1. Can be demotivating doing one small task

  2. A single worker missing or machinery malfunction can stop the whole production line

  3. Barriers to entry for smaller firms that can't afford the investment.
• Judgement points for how specialisation and division of labour helps address the problem of scarcity:

  > Adoption of specialised production and the trading

  of the consequent surplus has been a significant

  breakthrough when it comes to answering the

  question, “ How to produce?”