The Division of Labour & the Production Possibility Curve.
The Division of Labour & the Production Possibility Curve
1a) Primary production is the process of extraction of minerals from various natural sources, for example, the earth’s crust or the sea. Here are two examples of primary industry, farming and fishing.
1b) Secondary production is the process of turning the raw, unprocessed materials that have been extracted, into something that can be sold for a profit. This process is called manufacturing. Two examples of manufacturing are, turning unprocessed diamonds into valuable gems, and the making of cars.
1c) Tertiary production does not actually revolve around a tangible product that has been extracted from somewhere. It is the supply of a service, for example, the education system or the retail of clothes.
2) The predominant reason why employment in the manufacturing sector has declined is because of cheap imports. It is cheaper nowadays for a business to import the products it needs than to manufacture the goods themselves. This is because of cheap labour overseas, in china for example, where workers are paid very low wages to produce a product like a television.
The second reason why employment in the secondary sector has diminished is because the tertiary sector has grown, and so there is a demand for more workers, whereas demand has fallen in the manufacturing sector due to various factors. This is a clear sign of the further development of the British economy, for as countries develop, they shift from primary production, through secondary production and finally the tertiary sector becomes the strongest industry.
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The third reason why employment in the manufacturing sector has lessened is that the size of the mining and quarrying industry has almost halved over an 8 year period. This is primarily because of the difficulty in extracting British coal, due to how far underground it is. Whereas, in Germany, their coal is relatively near the surface of the ground, making extraction costs much cheaper, and therefore cheaper to export to other countries.
3) Two other trends from the table are, firstly, the significant reduction in employment in the energy and water supply industry. This may have been caused due to an increase in technology, making processes more efficient, and so the need for workers lessened. The second trend in the table is the considerable increase in the service industries. This may be because businesses that give services to other bodies have, generally, a high profitability, and so they are able to grow and so recruit more workers.
4) The ‘Division of Labour’ is a concept that was invented by Adam Smith, which was written in ‘The Wealth of Nations’ in 1776. Essentially, the division of labour means that production of a good by a worker should be broken down into short, repetitive tasks carried out by a team of workers, producing parts of the original product. This will then lead to job specialisation, because each worker will become very skilled at the part they are making, and this would then further lead to a higher rate of efficiency, which could positively affect the profits and output of a business. An example of the division of labour is the production of Aston Martin cars. They are hand made by a small team of highly skilled workers, each making their own high quality part.
5) The advantages of using the division of labour method on a production line are that because the workers are constantly repeating a particular task they become very skilled at doing their job, and so many benefits arise from this, such as, speed of production, shorter training periods, output per worker increases, and arguably, quality rises too. All of these benefits can greatly affect the success of businesses, and the power of an economy.
The disadvantages are that the whole essence of the division of labour can create problems. This is because, as businesses strive to push their workers harder and make them work harder, they can become over-pressurised and this can seriously affect the quality of a product if it has been rushed. Another typical problem is that workers are not interested in the final product, so if problems arise, they will just let the next worker along the production line deal with it, and this problem ties in with Marxist theory of Alienation.
6) A production possibility curve is a diagram demonstrating the theory of opportunity cost, as can be seen below. If the economy produces an extra amount of mobile phones, then it will have to reduce the amount of watches it is able to make. Therefore, there is an opportunity cost because less watches can be made. The PPC also shows the amount of unemployed resources in an economy. The PPC can in addition monitor the amount of growth of an economy.
7) Population can be considered as a resource, and any increase in resources has the possible effect to make the PPC shift outwards. Consequently, if the population was to increase, then it is likely that the PPC would shift outwards. This is demonstrated in the diagram below. This is because more people need certain goods, for example, housing, and so demand goes up for those goods. This is the same for employment, if the population increases, then more people will need to be employed. This is not always the case though, for example, if there is a population increase, this could then lead to higher rates of unemployed resources, for example: the number of unemployed people.
8) War comes hand in hand with destruction, and with destruction comes the limitation of resources. This is shown in the graph by the inwards shift of the PPC. The statement declares that Serbian troops demolished Albanian houses and forcibly transported ethnic Albanians to the country’s border. The effect of this action on the economy could be devastating, as the population would be drastically reduced, thus reducing demand for goods. To add to this problem, NATO bombed Serbia’s military infrastructure, ie: bridges, and oil storage facilities in retaliation. This means that the country’s infrastructure would be severely damaged, which would cause all sorts of problems. For example, people would not be able to travel to and from work, and goods would not be able to be transported to businesses, all of which hinder the Serbian economy’s performance.