Advantages and Disadvantages of Specialisation and Money

What are the three advantages of Specialisation in the division of Labour? And Why?

• Increased Productivity because workers become more skilled in specific tasks.

• Lower costs

• You can operate Economies of scale because mass production is possible

What is the definition of productivity?

Output per worker per unit of time

What is the definition of mass production?

Producing a large quantity of identical goods efficiently

What are the 4 Disadvantages of Specialisation in the Division of Labour? And why?

• High staff turnover because workers may find repetitive tasks monotonous, unfullfilling, unrewarding, beneath them leading to Job disatisfaction.

• Dependency because overeliance on a range of specific workers doing specific tasks in with specific machinery in specific factories

• Structural unemployment because workers are trained in single/fewer tasks or machines replace their

• Lack of variety because mass produced goods reduce consumer choice

What is money?

Anything generally accepted as a payment of a debt, avoids the need to barter and the double coincidence of wants

What are the ‘characteristics’ of money?

Acceptable to all, portable, durable, easily divisible, uncounterfeitable and scarce in supply 

What are the Four Functions of Money?

• Medium of exchange (facilitates transactions between buyer and seller)

• Unit of account (a nominal unit of measure)

• Store of value (asset that holds over time)

• Standard for deferred payment (accepted way to settle debts)