Unit 1: Division of labour and specialisation

• What is the difference between division of labor and specialisation?

  Division of labor entails breaking up a task into smaller components to allow workers to specialize, whilst specialization entails focusing on one component that makes up the production process.
• What is the advantage of specialisation?

  Efficiency and productivity
• What are the advantages of specialisation in production?

  Lower costs for firms and lower prices for customers, higher profits for firms and higher wages for workers, and it creates many low skilled jobs
• What are the advantages of specialisation in trade?

  Increased exports lead to economic growth and an increased variety of goods in a country
• What are the disadvantages of specialisation in production?

  Task repetition may lead to demotivated workers; and being trained in one skill may increase difficulties in finding a job.
• What are the disadvantages of specialisation in trade?

  Dependency on another country's resources and increase in the rate of resource depletion