Specialisation and the division of labour Learning objectives: What is meant by specialisation- a definition What specialisation requires to work The benefits and disadvantages of specialisation What is meant by the division of labour- a definition The benefits and disadvantages of the division of labour Measuring labour productivity December 18 Hayesfield 6th AS Economics

Hayesfield 6th AS Economics Specialisation Definition: Where individuals, firms or countries concentrate on producing a narrow range of goods and services e.g. Me – specialising in teaching Bendicks specialising in chocolates Somerset region specialising in cider UK specialising in services, esp. Financial services Depending on what they’re good at doing December 18 Hayesfield 6th AS Economics

Hayesfield 6th AS Economics Specialisation Requires successful trade- a way of exchanging goods and services money – to help transactions No good specialising unless can obtain other goods and services wanted and needed by households Trade allows us to rely on others to produce the goods and services we choose not to produce. Before money- used barter- exchanging goods for other goods- raised the problem of matching wants and needs December 18 Hayesfield 6th AS Economics

Hayesfield 6th AS Economics Specialisation Benefits Reduces the problem of scarcity- greater output Wider range of goods and services available Higher quality of goods and services Trade increased- economy grows Specialising in what you are good / have a natural advantage in increases output Uk can’t produce oranges, but can have them by exchanging other goods for them Specialisation increases expertise and quality Higher production and trade lead to growth December 18 Hayesfield 6th AS Economics

Hayesfield 6th AS Economics Division of Labour Definition: Where a firm specialises in producing a good or service and the production process is broken down in to separate tasks. Adam Smith’s pin manufacture Formula 1 pit stop e.g. Car production line December 18 Hayesfield 6th AS Economics

Hayesfield 6th AS Economics Division of Labour Advantages Workers become better/ more skilled at their job Productivity increases Time saved Capital/machinery used efficiently- specific jobs have specific machinery Consumers benefit from lower prices December 18 Hayesfield 6th AS Economics

Hayesfield 6th AS Economics Division of Labour Disadvantages Boredom- over time workers lose motivation, quality suffers Unskilled work- low pay Working conditions poor Over-reliance on one job- what happens if become unemployed? December 18 Hayesfield 6th AS Economics

Measuring labour productivity Distinguish between Production- a firm or country’s output Productivity- output per worker December 18 Hayesfield 6th AS Economics

Measuring labour productivity Total output in a given time period Number of units of labour used December 18 Hayesfield 6th AS Economics

Measuring labour productivity Benefits of higher productivity: Lower average costs of production Higher profits Economic growth – outward shift in PPF December 18 Hayesfield 6th AS Economics