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What is division of labor and specialization?
Division of labor means dividing the production process into various stages enable the workers to focus on specific tasks assigned to them.
Specialization takes place when workers are assigned to perform specific tasks in the production process. To be a competent worker, they will require less training and this will lead to increase in labor productivity, as a result firms will get benefited from economies of scale and increased efficiency.
Examples of specialization and division of labor–
In the process of producing cars, there will be high degree of labor specialization.
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Scarcity and specialization–
Specialization requires trade. It simply means countries that don’t produce oil get oil exported from other countries that has large reserves. The country with oil can also ask for something which they need. This helps in reducing the problem of scarcity.
Problems in specialization-
Problems in specialization in trade-
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