1.1.5
Specialisation
When we concentrate our resources on a specific product or task e.g within extended families in LIC, within businesses and organisations, in a country or in a region
Possible gains from specialisation
Higher outputs: total production is raised and quality is improved
Possible gains from specialisation
Variety: consumers have access to a greater variety of high quality products
Possible gains from specialisation
A bigger market and economies of scale: an expansion of global trade increases the size of the market offering opportunities for economices of scale to be exploited, leads to lower unit costs and lower prices for consumers
Possible drawbacks from specialisation
Some workers receive little training and other jobs are hard to find so structural unemployment arises from occupational immobility
Possible drawbacks from specialisation
Mass-produced standardised goods may lack variety which damages consumer welfare
Possible drawbacks from specialisation
Dangers of over-specialisation e.g farmers may become over reliant on one crop
Division of Labour
Where the production process is broken down into many seperate tasks