1 / 24

Specialisation, Exchange and Production Possibilities

This article examines whether the UK can feasibly grow bananas, looking into the concepts of specialisation, exchange, and production possibilities. It analyses the benefits and drawbacks of specialisation, including resource constraints, market vulnerabilities, and the costs of consumer goods. Additionally, it explores the Production Possibility Curve (PPC) and how technological advancements and economic systems influence production output. Understanding these dynamics will provide insights into the UK's agricultural potential amidst global trade realities.

wilmet
Télécharger la présentation

Specialisation, Exchange and Production Possibilities

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Specialisation, Exchange and Production Possibilities

  2. Is it feasible for UK to grow its own bananas? • Specialisation – The concentration of a firm or economy to produce a particular good or service. • Exchange – Process of trading goods and services

  3. Benefits of Specialisation and Trade • Increases output for all countries if each specialises in their strength. (Bananas wouldn’t grow well in Cheshire) • Greater variety of goods and services available. • Trade is the means by which economies grow. Developing become Developed (e.g.China’s economy doubles every 7yrs)

  4. Where are these goods and services produced? • Oil • Wheat • Digital TVs • Cars • Movies • Identify these products as good or service. Can they be classified as a Factor of Production too?

  5. Check the Label on your clothing. Where was it made? • List reasons why are many products made in Asia?

  6. Drawbacks of Specialisation • Resources can run out (e.g. Oil, copper). What happens then? • Cheap imported goods means manufacturing jobs are lost in UK • Weather affects production (Russian fires affecting wheat prices) • Consumer tastes change leaving countries exports vulnerable (tourism) • Global disasters can now affect people millions of miles away – Increased globalisation means we are ill interdependent. • Primark prices going up due to Pakistan floods. Explain Why? • Complete Activity p.9 AS Book

  7. Division of Labour • To ensure competitiveness once a firm or economy specialises in production of a good or service. Labour costs must be kept low. • Definition – Specialisation of labour into separate tasks. • This insures higher PRODUCITIVTY per worker • Define productivity:

  8. Explain why your clothes from Asia are so inexpensive. • Use the concepts of: • Specialisation • Division of labour

  9. Specialisation • What is the role of Money in Exchange • What does ‘Barter’ mean? Why is the system not used today. • Why is Division of Labour important • Are these things compatible • Growth and Happiness

  10. PPC • Define • Production Possibility Curve • The maximum quantities of different combinations of output of two products, given current resources and technology.

  11. Production Possibility • What does the PPC show us? • It is a simple model to show how resources are allocated which takes account of scarcity and choices. • Why would the production possibility be different in the UK than Uganda? • Different quantity and quality of factors of production.

  12. Guns Butter Production Possibility • Choice in the National Economy

  13. Guns A 100 ● B 40 ● 3,000 8,000 Butter Trade-offs • Explain using figures, how moving from Point A to Point B illustrates ‘opportunity cost’?

  14. Military Goods Consumption Goods Production Possibility Curve • Reallocation of resources & factor mobility • Production Frontier • Transformation Curve

  15. PPC Activity • Read p.12-13 AS Book • Complete Activity on p.13

  16. Capital Goods ● D ● A Shift Movement C ● ● ● B E Consumption Goods Movements and Shifts

  17. Outward shift of PPC • Two Reasons; • Economic Growth • Change in productive potential of an economy • Technological Change • Improvements in technology

  18. Consumer Goods A 100 ● B 40 ● 3,000 8,000 Capital Increasing Productive Potential of PPC • Explain how a reduction in producing consumer goods is good for an economy

  19. How are some countries better off than others?

  20. Why is USA rich and Tongo poor? • Why are some countries able to produce more goods and services than others? • World’s poorest countries tend to have few/poor FACTOR ENDOWNMENTS. • Factors of production are more productive to achieve greater economic growth.

  21. Factor Endowment What would be the stock of factors of production in; • UK • Brazil • Japan • India

  22. Factor endowment • The issues of inequality in the World is more complex than factor endowments, but this is one way of understanding disparities (differences) between • Developed and Developing economies • Discuss the merits of globalisation • Use key concepts of specialisation and economic growth

  23. Economic Systems Different countries arrange their economic resources differently Who answers the question • What? • How? • For Whom? In market and planned economy

  24. The Economic System • Free Market • Command Economy • Mixed Economy • Complete Q on Mixed Economy AS Book p.19

More Related