ECONOMICS
SCARCITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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specialization of labor
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absolute advantage
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macroeconomic theory
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a command economy
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an entrepreneur
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Detailed explanation-1: -Specialization Leads to Economies of Scale The more they focus on one task, the more efficient they become at this task, which means that less time and less money is involved in producing a good. Or put another way, the same time and the same money allows for the production of more goods.
Detailed explanation-2: -The reason why is something called the division and specialization of labor, a production innovation first put forth by Adam Smith in his book, The Wealth of Nations (See Figure 2).
Detailed explanation-3: -The division of labor allows individuals and firms to specialize and to produce more for several reasons: a) It allows the agents to focus on areas of advantage due to natural factors and skill levels; b) It encourages the agents to learn and invent; c) It allows agents to take advantage of economies of scale.
Detailed explanation-4: -There are two main sides of specialization: microeconomics and macroeconomics.