Lesson: What Is Economics and Why It Is Important 

Why the Division of Labor Increases Production: Specialization (continued)

💡
  • The second way division of labor increases production is with specialization of skills.
  • Some specialization requires specific skills. When workers have the skills they need, they are able to work faster and better.

2. Workers who specialize in certain tasks often learn to produce more quickly and with higher quality output.

This pattern holds true for many workers, including assembly line laborers who build cars, stylists who cut hair, and doctors who perform heart surgery. In fact, specialized workers often know their jobs well enough to suggest innovative ways to do their work faster and better. A similar pattern often operates within businesses. In many cases, a business that focuses on one or a few products (sometimes called its “core competency”) is more successful than firms that try to make a wide range of products.

◀︎ Live Sessions
Topic 2: Scarcity, Demand, and Supply ▶︎