Explain the advantage of specialisation and exchange in an economy.
Specialisation involves individuals, firms, regions or economies concentrating their efforts on the production of some goods and services rather than others. This can lead to increased output and efficiency gains. This means that surplus can be exchanged with other individuals/economies. E.g. Scotland may specialise in the production of whisky and trade it's surplus with France to benefit from the consumption of champagne which is not produced domestically.