Specialisation
Specialisation occurs when economic units (individuals, firms, or countries) concentrate their productive effort on the goods and services where they have comparative advantage. This typically increases overall output and efficiency compared to each unit attempting self-sufficiency.
Real World
Taiwan Semiconductor Manufacturing Company (TSMC) produces over 90% of the world's most advanced microchips, allowing countries like the US and Germany to focus resources on designing products rather than fabricating chips themselves.
Exam Focus
Always link specialisation to comparative advantage and rising productivity — avoid simply describing 'doing one thing well'.
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