Question

“It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The ta[i]lor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a ta[i]lor.... All of them find it [in their best interests] to employ their whole industry in a way in which they have some advantage over their neighbours, and to purchase...whatever else they have occasion for.” From Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776. What economic concept is Adam Smith describing in this passage? a. division of labor c. productivity b. specialization d. paradox of value

Answer 1

The correct answer is b), specialization.

Step-by-step explanation:

The specialization is the focus on a single task instead of covering the entire work process. Therefore each person does the job he knows best without using unnecessary resources.

The division of labor is the form of production where tasks are divided, which are carried out by specialized workers.

The productivity is the ability to produce goods with certain resources. Specialization increases productivity.

The value paradox assesses how the value of goods is determined.