In an economy characterized by a highly developed division of labour, individuals focus on producing a single specialised component or service, meaning they rely on others for almost all of their consumption needs. For this system of specialisation to function efficiently, which of the following is a necessary prerequisite?
Perfect occupational mobility of the labour force across all specialised sectors.
A widely accepted medium of exchange to eliminate the high transaction costs of barter.
Government-mandated price controls to ensure specialised goods remain affordable.
An equal distribution of productive efficiency and resources across all sectors.
156 exam-style questions on AQA A Level Economics 1.4 Production, costs and revenue, covering 1.4.1 Production and productivity, 1.4.2 Specialisation, division of labour and exchange, 1.4.3 The law of diminishing returns and returns to scale (A-level only), 1.4.4 Costs of production, 1.4.5 Economies and diseconomies of scale, 1.4.6 Marginal, average and total revenue, 1.4.7 Profit, and 1.4.8 Technological change (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.