Read chapter 1 in Real World Micro especially items 11 FreeM

Read chapter 1 in Real World Micro, especially items 1.1 (“Free-Market Outcomes are Not Fair—And Not Free”) and 1.2 (“Shaking the Invisible Hand”).

Specialization can mean that different people produce different things or that different people perform different tasks in producing the same things.

Give examples of different people producing different things and exchanging their products (the social division of labor). And give examples of different people performing different tasks to produce the same things (the detail division of labor).

Why do we specialize in what we produce (the social division of labor)? Does this explain why we specialize in doing different things to produce the same good (detail division of labor)?

Some see the division of labor as the source of social and economic inequality. Do you think that this is true? Discuss whether it is true of both the social and the detail division of labor?

Solution

Different people producing different things: In a computer division some workers produce spare parts, some workers produce body, and some workers produce mother board. All these efforts make the final product, computer.

Different people performing different tasks: In a computer making business some workers perform production task, some workers perform accounting task, and some workers perform marketing task. But all of them are working for the same thing, computer.