Specialisation
Definition. Specialisation is the concentration by an individual, firm, region, or country on producing a narrow range of goods or services, rather than being self sufficient, so that output can be exchanged for other things through trade. At national level it underlies the gains from international trade.
Specialisation according to comparative advantage, producing what one can make at lower opportunity cost, allows world output to rise and lets countries consume beyond their own production possibilities through trade. It raises productivity but increases interdependence.
This term belongs to Comparative Advantage in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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