Specialisation Flashcards

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Note: We may include questions that have multiple correct answers. It's useful to remember specific examples to understand these concepts better.

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What is specialisation in economics?

It means focusing on one product or a small range to make more at lower cost.

What is the division of labour?

Splitting production into tasks, with each worker doing one task.

How does division of labour increase productivity?

Workers repeat one task and get faster. Time is saved by not switching jobs.

What is one benefit of specialisation for consumers?

Lower prices, because firms can produce more cheaply.

What is one drawback of specialisation for workers?

Work can become boring, as the same task is repeated.

What is one risk of specialisation for a country?

Over-reliance on a few products. If demand falls, jobs and income can drop.

Why does specialisation lead to trade between countries?

No one country makes everything. Countries export what they make best and import the rest.

What does comparative advantage mean?

A country has it if it can make a good by giving up less of other goods than another country.

How does money help specialisation?

Money lets people sell what they make and buy what they need, without swapping goods. This supports specialisation.

What are economies of scale and how can specialisation help?

They are cost savings when a firm makes more output. Specialisation helps raise output, so average cost per unit can fall.