specialisation

• What is specialization in economics?

  Concentrating on a narrow range
• Specialization occurs when firms or countries concentrate on producing what they do best
• In what does the Champagne region of France specialize?

  Champagne production
• The UK economy specializes in the production of services.
• Specialization will only work if there is trade
• Specialization reduces scarcity because it allows countries to import goods they cannot produce efficiently
• Why is trade essential for specialization?

  To exchange goods and services
• Money acts as the appropriate means of exchange
• What is the main problem with bartering as a means of exchange?

  Duplicate of wants
• Money eliminates the duplicate of wants problem in trade.
• Match the advantage of specialization with its description:

  Greater range of goods ↔️ More variety due to specialization

  Greater output ↔️ Higher quantity and quality

  Increased trade ↔️ Exports lead to economic growth

  Improved living standards ↔️ Material prosperity increases
• Why does specialization lead to greater output?

  Efficient use of resources
• As economies specialize and trade more, living standards improve.
• Specialization reduces the reliance on finite resources.

  False
• What happens if a country specializing in tourism experiences bad weather?

  Economic downturn
• Changing tastes and fashions can create problems for countries specializing in products that rely on demand
• What is national interdependence in the context of specialization?

  Reliance on other countries
• Deindustrialization occurs when a country's specialization is surpassed by others
• National interdependence can become a problem if relations between countries deteriorate.
• Why did the UK's manufacturing sector decline after the Industrial Revolution?

  Other countries became more efficient