Explain exchange [2]
- Allows us to trade our own products for those of others, giving us a range of goods and services that we want or need
- Money makes the exchange of products easy, enabling us each to specialise and so become more skilled and productive
Explain division of labour
Involves organising of employees so that individuals specialise in one part of the production process
List the benefits of division of labour for employers [2]
- Increase productivity
- Lower average costs due to efficiency and reduced training costs
List the negatives of division of labour for employers [2]
- Workers become less motivated
- Higher staff turnover
What is meant by staff turnover?
When members of staff leave to work elsewhere
List the benefits of division of labour for employees [2]
- May receive higher pay
- Workers can specialise in areas on interest
List the negatives of division of labour for employees [2]
- Repetitive/boring
- Reduced flexibility/replacement by automation
Explain specialisation
Means that people make the most of their skills by concentrating their expertise in a particular task
List the benefits of specialisation to employers [2]
- Increased productivity
- Lower average costs due to efficiency and reduced training costs
List the negatives of specialisation to employers [2]
- Redcued flexibility
- More chance of production problems
List the benefits of specialisation to employees [2]
- May receive higher pay
- Workers specialises in areas of interest
List the negatives of specialisation to the employee [2]
- Repetitive or boring
- Skills might be too narrow
Explain efficiency [4]
- Means using resources in the most economical way possible
- Land, labour, capital and enterprise are all main resources
- Value added will increase if efficiency can be improved
- Better profit margin too
