#3.3 Specialisation and the Division of Labour

Specialisation occurs when individuals, firms, or economies focus on producing specific goods or services in which they have an advantage.

Specialisation leads to self-sufficiency, reducing the need for trade.

The division of labour involves breaking down the production process into individual tasks.

Specialisation results in lower production output because workers focus on fewer tasks.

Workers become more productive when they specialise in specific tasks.

Adam Smith demonstrated that division of labour could significantly reduce productivity.

Henry Ford’s introduction of the conveyor belt increased automobile production.

Specialisation reduces the quality of finished goods because workers perform fewer tasks.

The division of labour makes production quicker and cheaper compared to a single worker completing an entire product alone.

One disadvantage of the division of labour is worker dissatisfaction due to repetitive tasks.

Entrepreneurs play no role in organising production or bringing together factors of production.

Specialisation always results in economic growth, with no potential risks or downsides.

Greater productivity is one of the key benefits of specialisation and the division of labour.

Entrepreneurs take risks by investing their own money in business ventures.

Specialisation has no impact on economic growth.

If trade relationships are disrupted, economies that rely heavily on specialisation may struggle.

The division of labour allows firms to assign workers to specific tasks, increasing efficiency.

Trade is unnecessary in a specialised economy because all goods are produced domestically.

A key challenge of specialisation is that individuals and economies become dependent on others for goods and services.

Entrepreneurs must anticipate market needs and produce goods with recognized value.