Approaches to economic problem/types of economy REVIEW1.3 Approaches to economic problem/types of economy

MARKET – Where buyers and sellers meet to exchange goods and services - this does not have to mean face to face meeting MARKET ECONOMY- Where all resources are allocated by private individuals and groups PLANNED ECONOMY – Where all resources are allocated by the government MIXED ECONOMY- Where some resources are allocated by the government and other resources by private individuals and groups.

THE PUBLIC SECTOR – Organisations controlled by the government, service not profit The PRIVATE SECTOR – Run by individuals, for profit.

Past paper questions 2010 Q1b – (2) & (2) 2011 – Q2c (6) 2013 – Q2bii – (2)

REVIEW1.4 Specialisation

Specialisation is concentrating on what you are best at. This applies to individuals, companies and countries as a whole. Specialisation underpins the economic argument for trade

Benefits to firm Benefits to workers More productive Specialised workers tend to get higher pay Lower average costs Workers specific skills improve More motivation from job satisfaction

Costs to Firms Greater cost of training workers Quality may suffer if workers become bored Cost to workers Maybe replaced by machinery Boredom Workers skills will suffer if they are only doing one thing

Past paper questions Specimen Paper Q3 (6), Q4 (8) 2013 – 3d (8)