Why the Division of Labor Increases Production ?

  The formal study of economics began when Adam Smith published his famous book The Wealth of Nations in 1776. 

Smith introduces the division of labor, which means that the way a good or service is produced is divided into a number of tasks that are performed by different workers, instead of all the tasks being done by the same person. 

A restaurant also divides up the task of serving meals into a range of jobs like top chef, sous chefs, less-skilled kitchen help, servers to wait on the tables, a greeter at the door, janitors to clean up, and a business manager to handle paychecks and bills.

When the tasks involved with producing a good or service are divided, workers can produce a greater quantity of output. 

Why the Division of Labor Increases Production ?

i. Specialization in a particular small job allows workers to focus on the parts of the production process where they have comparative advantages. People have different skills, talents, and interests, so they will be better at some jobs than at others. The particular advantages may be based on educational choices, which are in turn shaped by interests and talents. 

ii. Workers who specialize in certain tasks often learn to produce more quickly with higher quality and often know their jobs well enough to suggest innovative ways to do their work faster and better. 

iii. Economies of scale. The average cost of producing each individual unit declines. If a factory produces more cars in the same period of time, the average cost of production per car will be lower.