SPECIALIZATION & DIVISION OF LABOR

The division of labor refers to the practice that the tasks of producing a good or service are divided up into separate tasks. When workers focus on performing separate tasks, specialization occurs. Within the economy as a whole, the division of labor explains why even if you bake your own bread, you typically don't grow your own wheat, grind it into flour, build your own oven, make your own bread-pans and so on. Instead, people specialize in a few skills and then take the wages that they earn from those skills to purchase the other goods and services that they desire from other specialists.

Specialization benefits everyone when the skills and strengths of peoplematch their job in a community. Keep in mind that when people do what they are good at and then trade their output with others who are doing what they are good at, we are better off than we would be if everyone tried to do everything for themselves. It’s better for the overall economy if individual people produce one thing well and trade it, than to produce poorly everything they use in day themselves.

Think of the example of the barber--could we all cut our own hair? Sure, but if we go to the barber's to get our hair cut, then we don't have to sacrifice the time it takes to learn how to get good at cutting hair and we can spend this time doing something else. We get a haircut and what ever else we are producing with our time.

But specialization is possible only when people are able to coordinate their production and consumption decisions with each other. The study of economics is largely concerned with explaining how this coordination takes place.

  1. What is division of labor?
  1. What is specialization?
  1. Why is it better to have one worker focus on one task?
  1. What does specialization require people to do?
  1. How does specialization affect the economy?
  1. A mother tells her two children, Sammy and Sarah, they are old enough for weekly chores. Thechores are vacuum two rooms, wash six windows, sweep two rooms, and dust six pieces of furniture. They can divide the chores between them. What is the best way for Sammy and Sarah to divide the chores based on the benefits of specialization? Why?

Define it:
/ Draw a Picture:
Benefits: / Drawbacks:
Define it:
When a country focuses resources on creating fewer specific products and services than they consume; make one thing well and trade for everything else
/ Draw a Picture:
Benefits:
Greater variety of products with trade
Produce more in less time
Better quality
More free time for workers / Drawbacks:
Dependent on others for important items
Over-specialization (one-crop economies and lack of diversification) can lead to economic trouble