1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

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

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

10. 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