Specialisation and Trade

    OCR
    GCSE

    Examination of the allocation of resources through the division of labour and the mechanism of exchange. The study encompasses the theoretical underpinnings of absolute and comparative advantage, the determination of terms of trade, and the evaluation of the benefits and costs of specialisation at individual, firm, and national levels. Candidates must analyse how specialisation drives productivity gains while assessing the risks of structural unemployment and over-reliance on specific sectors within a globalised economy.

    5
    Objectives
    4
    Exam Tips
    3
    Pitfalls
    3
    Key Terms
    4
    Mark Points

    Learning Objectives

    What you need to know and understand

    • Definition of Division of Labour (breaking production into separate tasks)
    • Formula for Labour Productivity (Total Output / Number of Workers)
    • The SPICED acronym (Strong Pound Imports Cheaper Exports Dearer)
    • Distinction between Tariffs (tax on imports) and Quotas (limit on quantity)
    • Concept of Economies of Scale and its impact on unit costs

    Marking Points

    Key points examiners look for in your answers

    • Award marks for precise definitions of specialisation and division of labour (AO1)
    • Credit responses that explicitly link specialisation to lower average costs and economies of scale (AO3)
    • Candidates must apply theoretical concepts to the specific industry or country data provided in the stem (AO2)
    • Reward evaluation that weighs short-term efficiency gains against long-term risks like resource depletion or loss of comparative advantage (AO3)

    Examiner Tips

    Expert advice for maximising your marks

    • 💡In 6-mark 'Analyse' questions, provide two distinct, developed chains of reasoning linked to the context
    • 💡For 12-mark 'Evaluate' questions, ensure the conclusion offers a supported judgement that answers 'to what extent'
    • 💡Always quote specific figures or trends from the data insert to secure AO2 application marks
    • 💡Use connective phrases like 'this leads to' and 'consequently' to demonstrate logical chains of reasoning

    Common Mistakes

    Pitfalls to avoid in your exam answers

    • Confusing 'production' (total output) with 'productivity' (output per unit of input)
    • Assuming a 'strong' currency is universally beneficial without considering the negative impact on export competitiveness (SPICED)
    • Providing narrative descriptions of trade patterns rather than analysing the economic causes and consequences

    Study Guide Available

    Comprehensive revision notes & examples

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    Key Terminology

    Essential terms to know

    Likely Command Words

    How questions on this topic are typically asked

    Calculate
    Explain
    Analyse
    Evaluate
    Discuss
    Assess

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