Notesale: Turn your study into money

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Theme 1: Commercial Operations
1
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4 Division of labor
Specialization
Specialization implies the production of a limited range of goods
by individuals, firms, regions, or countries
Specialization by individuals
Individuals become economically specialized when he/she
focuses on a narrow range of tasks
Example:
• Teachers who are specialized in teaching one subject
Specialization by firms
With this, firms get specialized for a narrow range of products
and they become experts in their field that may increase the
efficiency of the firms and they may also employ specialized
workers which may increase their profit
...

Walmart- Supermarket chain
Coca cola-soft drinks

Specialization by region
Certain geographical regions in some countries are
specialized in producing certain products

▪ Wine Production: Bordeaux, France
▪ Technology and Innovation: Silicon Valley, California,
USA
▪ Textile Production: Manchester, England
▪ Agriculture: Central Valley, California, USA
▪ Automobiles: Detroit, Michigan, USA:
Specialization by country
Some countries are specialized in producing certain goods and
services which they trade with other countries leading to increase
the world’s output
...
In simple words, commerce is the mechanism
through which goods and services reach the final consumer
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Commerce allows these goods from one region or
country to be traded with others in order for the specialized
products to get to where they are in demand
...
Commercial networks
and systems of trade enable specialized producers to sell
their goods to larger markets, well beyond their local areas
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Specialized products are bound to be distributed in the best
possible way to give service to both the producer and the
consumer
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It allows the specialized businesses to expand, create
jobs, and contribute to economic development
...
The
consumer thus has increased choices, which can better
match his needs
...

This supplements efficiency due to specialization, thus
allowing easy and efficient flow within the market
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Global division of labor means countries specialize
in what they are relatively best at producing and import the
rest through commerce
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Investors
venture into those industries where specialization has led to
success, increasing innovation and growth
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In its wake, the drive towards globalization
reinforces such interdependency, with large implications for
international relations and home policies
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International Trade
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Economic Cooperation
The interdependence among nations in trade, economic activities
around the world are interconnected and trade, investment, and
cooperation serve as the major driving forces that shape
international economic relationships
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