<p> Production and Efficiency</p><p>1. Specialisation</p><p>Define specialisation</p><p>Adam Smith’s Example of Division of Labour (Specialisation) in a Pin Factory</p><p>One man draws out the wire, another straightens it out, a third cuts it, a fourth points, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on is a peculiar business, to whiten the pins is another; it is even a trade by itself to put them in to the paper. </p><p>Give an example of specialisation by a region</p><p>Give an example of specialisation by an economy</p><p>What are the costs and benefits of specialisation?</p><p>Benefits Costs Productivity Boredom</p><p>Training Limited Skills</p><p>Lower prices Break down Why is money needed to allow specialisation to take place?</p><p>What is production?</p><p>What is meant by productivity?</p><p>Explain productive efficiency and illustrate it in two ways.</p><p>Amazon video on productive efficiency</p><p>Production Possibility Frontier. Average Costs ECONOMIES OF SCALE</p><p>Aim – To understand economies and diseconomies of scale</p><p>1. Define economies of scale </p><p>2. Work out the Average cost in the table below</p><p>Output (Units) Total Costs (£s) Average Cost (£ per unit)</p><p>1000 12000</p><p>2000 20000</p><p>5000 45000</p><p>10000 80000</p><p>20000 144000</p><p>50000 330000</p><p>100000 640000</p><p>500000 3000000</p><p>3. Explain the following internal economies of scale:</p><p>Financial</p><p>Technical</p><p>Marketing</p><p>Managerial</p><p>Purchasing 4. Draw a graph showing economies of scale and explain how they may lead to monopoly.</p><p>5. Define diseconomies of scale and explain why they might occur.</p><p>6. Draw a graph showing diseconomies of scale and explain how they may discourage the growth of firms.</p><p>7. Draw a graph showing economies and diseconomies of scale and productive efficiency.</p>