Advantages of specialisation at national level PDF

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Advantages of specialisation at national level 

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Economies of scale and efficiency – Just like specialisation by individuals, countries can specialise in what they do best, and this leads to efficiency and economies of scale. It can therefore increase output of the country. When more and more countries specialise, it increases world output. Job creation – Specialisation leads to increased output and therefore it could lead to more investment and thus jobs are created as the output increases. Moreover, it requires skilled labour and thus earnings are higher. National level specialisation allows more international trade to take place and therefore more goods that other countries produce can be imported as well. Therefore it increases choice for the people of the country Revenue to the government – As income increases, and as more trade takes place, it gives the possibility for the government to increase the revenue. Improves standard of living – increased choice for the consumers, increased income, increased output, increased infrastructure means a better quality of life for the people, therefore standard of living will improve

Disadvantages of specialisation at national levels 

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Danger of unemployment – Even though national level specialisation usually creates more jobs, there is a risk of certain types of structural unemployment to occur. As the country moves towards specialisation, the workers in the declining industries may not find suitable work for them Over-exploitation of resources – output maybe increased by over-exploiting resources. In this case todays output is increased at the cost of the future generations. Negative externalities/ social cost – There could be external costs like damage to the environment which is a matter of concern...