Answer to Question #220764 in Microeconomics for John

Question

Discuss whether labour is the most important factor of production and therefore division
of labour should be applied to its maximum extent

Answer 1

As division of labor increases productivity, it also means that it's cheaper to produce a good. In turn, this translates to cheaper products. If for example labor is divided between five people who specialise in their task, it becomes quicker and more efficient. In turn, the number of goods produced increases.