Answer to Question #222393 in Economics of Enterprise for sshhaa

Question

2 Which one of the following did Adam Smith identify as an advantage of the division of labour? A Worker absence may stop production B An increase in average costs of production C An increase in output per worker D Workers may be demotivated by repetitive tasks

Answer 1

B.

An increase in average costs of production

EXPLANATION

Smith thought the key was to encourage the division of labor. Smith argued that workers could produce more if they specialized.

Smith argued that if all production could be specialized like the pin factory, workers could produce more of everything.