Final answer:
Division of labor is the subdivision of tasks in the production process to different workers, leading to increased expertise, efficiency, and economic growth by producing goods more quickly and effectively.
Step-by-step explanation:
The division of labor refers to the process in which the production of a good or service is divided into a series of tasks that are completed by different workers, instead of each worker being responsible for producing the whole product. This method is beneficial for economic growth due to several reasons. First, it allows for worker specialization, meaning that each worker becomes adept at their specific task, thus increasing their efficiency and the overall production speed. Second, it saves time as workers do not switch between tasks, which often requires resetting tools and equipment. Finally, it allows businesses to take advantage of the different skills and talents of their workforce more effectively.
For example, in a pin factory as observed by economist Adam Smith, instead of one worker making 20 pins a day, 10 workers could make 48,000 pins in a day, each specializing in one or two tasks out of the 18 required in the pin-making process. This specialization increases production, efficiency, and can lead to economic growth as more goods are available for trade and consumption at lower costs.