Specialisation, Division of Labour and Exchange
Nobody makes everything themselves. Learn how specialisation and the division of labour raise output, the drawbacks that come with them, and why money makes the exchange that specialisation depends on possible.
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Better together
Think about your breakfast. You did not grow the wheat, mill the flour or build the toaster. Other people specialised in each of those jobs, and you traded money for the result. This module is about how specialising and dividing up work makes an economy produce far more, the drawbacks it brings, and why money makes the trading possible.
Specialisation, defined
Four terms run through this topic. Learn them first.
Two sides of the coin
The division of labour brings clear gains, but also real drawbacks.
Match the term
- Specialisation
- Division of labour
- Productivity
- Barter
- Concentrating on one task, product or job
- Splitting production into separate tasks for different workers
- The amount of output produced per worker
- Swapping goods directly without money
Name the idea
On a car assembly line, one worker fits only the wheels, all day long. What is this an example of?
- The division of labour
- Barter
- Productivity
- Structural unemployment
Why money matters
Specialisation only works if people can trade what they make. Under barter you must find someone who wants exactly what you have and has what you want in return. Money solves this: it is a medium of exchange that everyone accepts, so specialised producers can buy and sell freely.
Match the word
- Assembly line
- Structural unemployment
- Exchange
- Unit cost
- A production line where each worker repeats one task
- Job loss when a particular skill is no longer needed
- Trading what you make for what you need
- The cost of making one item
Benefits of dividing the work
Which TWO of these are BENEFITS of the division of labour? Choose all that apply.
- Workers become quicker and more skilled
- The cost of each unit falls
- Work can become boring and repetitive
- Workers become less flexible
Work out productivity
A firm produces 200 units in a day using 10 workers. What is the output per worker?
Why unit costs fall
Put the chain of cause and effect into a sensible order.
- Workers specialise in one task
- They repeat that task again and again
- They become faster and more skilled
- Output per worker rises
- The cost of each unit falls
Specialising and dividing the work
Concentrating on one task or product is called _____. Splitting production into separate tasks for different workers is the _____. Output produced per worker is a measure of _____. Swapping goods directly without money is called _____. Money is useful because everyone accepts it as a medium of _____.
Spot the drawbacks
Tap the TWO drawbacks of the division of labour.
- Work can become boring and repetitive
- Workers become less flexible
- Output per worker rises
- The cost of each unit falls
What does it show?
For each situation, choose the idea it best illustrates.
- Two producers each make only one product, then trade so both end up with a mix of goods. What makes this possible?
- A worker does the same single task every hour of every shift and starts to lose interest. What is this a drawback of?
- A machine takes over the one task a group of workers were trained for, and they lose their jobs. What does this show?
Weigh it up
Explain the benefits AND the drawbacks of the division of labour for a firm.
- Give two benefits of the division of labour
- Give two drawbacks of the division of labour
- Give an overall judgement for the firm