Question

Specialization and the division of ______ can increase productivity. Please choose the correct answer from the following choices:
Answer choices
- knowledge
- monetary
- resources
- capital
- labor

Answer 1

Answer:

Specialization and the division of labor can increase productivity.

Explanation:

Specialization is about an invidivual focusing on very specific tasks that are best suited to them according to their skills and knowledge. This concept can be applied to companies and countries, as they specialize on producing a small amount of products they excel at, for having the raw material, knowledge and/or technology to do so.

The division of labor is about breaking down the production process of a good in different parts performed by different people instead of having all workers performing all the tasks. The idea is to let workers be specialists in a small amout of tasks so that they can be more efficient and overall productivity can be greatly increased. This concept was introduced by the 'father of economics' Adam Smith in his book "The Wealth of Nations" released in 1776.

Specialization and division of labor are complementing concepts that bring a company an increase in productivity and helps achieve economies of scale.