Specialisation: Labour, Region and National Level

specialisation: labour, region, national levels
Advantages and disadvantages for each type of specialisation Specialisation on labour (DOL)
Advantages:
 Massive production
 Faster and efficient use of tools
 Lower cost ( no need to retraining and reinstruct)
Disadvantages
 Boredom due to repetitive work and dull job
 Alienated to co-workers
 Danger of unemployment

Specialisation on regional level
Advantages:
 efficient use of resources
 Create jobs to residents
 Bring in income
Disadvantages:
 Risk of low demand
 Rising costs

Specialisation on national level:
Advantages:
 Achieve economies of scale
 Job creation
 Provide income to government
 Increase choice
 Improve living standard
 Surplus can be exported thus revenue earned

Specialisation on national level:
Disadvantages:
 Danger of unemployment
 Overexploitation of resources
 Negative externalities/ social cost
 Rising cost

Absolute Vs comparative
Absolute advantages
Those country able to produce more outputs than its rival country. For instance
Country

Item A

Item B

Japan
USA

100
95

200
250

Japan has the absolute advantage in production of item A.
USA has the absolute advantage in production of item B.

Absolute Vs comparative
Comparative advantage:
Those country that able to produce more in all production and has lower opportunity cost than other country.
For instance:
Country

Item C

Item D

Japan
USA

100
50

400
300

Japan has absolute advantage in both production so it needs to concentrate in one production to be specialised. Therefore it should focus on production of item C.

discuss whether it is wise to exploit than conserve resources?

Q5d ( N05) & Q6d (J08)

exploit

conserve

 ↑employment, income,

 Non renewable resources,

living standard, trade position in the country.
 Govt receives tax revenues and spend them on education, health care and
support