Specialisation, Division of Labour, and Exchange (AQA A-Level Economics): Flashcards
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Specialisation definition
Specialisation definition
When a worker focuses on one task or narrow range of tasks
Division of labour definition
Division of labour definition
Breaking production into separate tasks for different workers
3 benefits of specialisation/division of labour
3 benefits of specialisation/division of labour
Time savings, better machinery use, skill development via practice
Time efficiency gain from specialisation
Time efficiency gain from specialisation
Workers avoid wasting time switching between different activities
Capital deepening definition
Capital deepening definition
Investing in new, more advanced technology
De-skilling meaning
De-skilling meaning
Overall skill set narrows from focusing on one activity exclusively
Barter definition
Barter definition
Direct exchange of goods/services without using money
Double coincidence of wants
Double coincidence of wants
Two parties must each want what the other offers
Money's role as medium of exchange
Money's role as medium of exchange
Eliminates need for double coincidence of wants
Adam Smith's pin factory: output with specialisation
Adam Smith's pin factory: output with specialisation
10 workers made ~48,000 pins/day vs ~1 pin/day without it