Question

Which of the following are among the reasons offered by Adam Smith for why specialization results in higher levels of output?

(Select all that apply. Hint: There are 2 correct answers.)

Select all that apply:

• Specialization in a particular small job allows workers to focus on the parts of the production process where they have an advantage.

• Specialization allows businesses to take advantage of economies of scale.

• Specialization allows workers to experiment with different tasks to see which responsibilities make them happiest at work.

• Workers who specialize in certain tasks forgo an opportunity to learn how to do new tasks efficiently.

Answer 1

• Option a and b are the answers.
• Specialization in a particular small job allows workers to focus on the parts of the production process where they have an advantage. Specialization allows business to take advantage of economies of scale.
• specialization increases the overall output of a firm and thereby lead to economies of scale. While specialising on a particular job will make the person more efficient in what he is doing, it will result in improved overall productivity.