Specialisation, the division of labour and exchange

Overview

Division of labour, barter and why does it limit exchange and specialisation at the national level.

What you need to know

Answer each one before you reveal it.

Questions from this subtopic

Each one with the model answer underneath.

1. 1

   Define specialisation.

   Model answer

   Specialisation is the concentration of a worker, firm, region or country on a narrow range of products. Output is then exchanged for the other goods that are wanted.

2. 2

   Define the division of labour.

   Model answer

   The division of labour is the breaking of a production process into separate tasks. Each worker then performs one of those tasks repeatedly.

3. 3

   Which economist first described the division of labour in a pin factory?

   Model answer

   Adam Smith described the pin factory in The Wealth of Nations, published in 1776. Ten workers each performing a separate operation produced about 48,000 pins a day between them.

4. 4

   Give three advantages of the division of labour for a firm.

   Model answer

   Workers become more skilled at a single repeated task, which raises output per worker. Less time is lost switching between tasks, and specialised machinery becomes worth buying.

5. 5

   Give three disadvantages of the division of labour for workers.

   Model answer

   Repetitive work causes boredom and lowers motivation, which can raise absenteeism. Workers also risk repetitive strain injury and find their narrow skills hard to transfer.

6. 6

   Explain how the division of labour lowers average costs.

   Model answer

   Higher output per worker spreads fixed costs over a larger number of units. Specialised machinery and shorter training also cut the cost of each unit produced.

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