Final answer:
Adam Smith's reasons for increased output via division of labor include specialization and comparative advantage, improved skill through learning and practice, and economies of scale.
Step-by-step explanation:
Adam Smith's classic notion that division of labor can significantly increase production output is founded on three key reasons:
- Specialization and Comparative Advantage: Workers with different skill sets can focus on tasks where they are most efficient, thus increasing productivity as a whole.
- Learning and Practice: By repeatedly performing a specific task, firms and workers gain proficiency and speed, further improving the output of their work.
- Economies of Scale: Specialization can lead to larger production runs of a product, which spreads fixed costs over more units, lowering the average cost per unit and potentially increasing total output.
This system of dividing tasks allows workers and businesses to produce goods more efficiently compared to each worker producing the good or service entirely on their own.