Topic 2

• market

  a place where buyers and sellers meet to transact
• factor market

  a market where resources are traded
• product market

  a market where goods and services are traded
• primary sector

  the sector of the economy where natural resources are extracted
• secondary sector

  the sector of the economy where resources are manufactured in to finished goods
• tertiary sector

  the sector of the economy where services are provided
• specialisation

  when a nation or individual concentrates its productive efforts on producing a limited variety of goods
• division of labour

  narrow specialisation of tasks within a production process so that each worker can become a specialist in doing one thing, especially on an assembly line
• good

  a tangible product
• service

  an intangible product
• exchange

  the trading of one item for another, i.e. a product for money
• scarce resources

  resources that are limited in supply
• what are the benefits of specialisation for workers and firms?

  workers:

  • allows workers to become more skilled at a particular task.
  • can produce a good in less time

  firm:

  • increased efficiency
  • decreased wastage as workers are more skilled at one task
• what are the costs of specialisation for workers and firms?

  workers:

  • skillset can become limited
  • can cause boredom over time

  firms:

  • can cause a lack of motivation in workers - less productivity
  • any mishaps along the production line can cause whole line to stop.