Final answer:
The statement that division of labor involves breaking down production into small tasks performed by different workers is true. An example is an assembly line, where specialization increases efficiency and productivity as shown by Adam Smith's study of a pin factory.
Step-by-step explanation:
The statement that division of labor involves breaking down the production of a product into a series of small, elementary tasks, each of which is performed by a different worker, is True. The concept of division of labor is well-exemplified by workers on an assembly line, where each individual specializes in a specific function, contributing to a more efficient overall production process. One of the classic examples provided by economic theory comes from Adam Smith's observations of a pin factory, where he demonstrated how a group of workers, each focusing on specific tasks, were able to produce significantly more than if each worker attempted to create the entire product individually.
Adam Smith cited several reasons for why the division of labor could increase production. These include increased dexterity in each worker, the saving of time that is commonly lost in changing tasks, and the innovation of machinery that aids in production. Smith noted that in a pin factory, rather than one worker making 20 pins a day, ten workers might produce 48,000 pins in a day by each taking on specialized tasks. This example highlights how specialization and division of labor can greatly enhance productivity.