Economics

Cory

Microeconomics

Wednesday eve

Division of labor

The division of labor is essential in any efficient industry. The division of labor can be defined as splitting up a certain trade (i.e. making straight pins) so it can be performed more efficiently. This is most commonly seen in the manufacturing industry where one person may be qualified to produce the final product all by themselves they probably would not be able to make even a single product in one day. When you split this trade up between several people the output is much higher.

There are benefits that transpire from this business philosophy, such as; the social animal theory is appeased. The social animal theory is the idea that people would rather work in groups than alone. When we divide a complex task up into several skilled trades we allow the workers to work in a social environment also increasing the output. There is one problem that arises out of this, people don't usually work together in those groups. There is usually a boss and orders roll down hill from him and people constantly profess to enjoy obeying orders.

Some people may wonder why if all of these products will be built by individuals then why would we need businesses. Why don't we just sell our skills and make a profit that way. With this idea we run in to what is known as the problems with negotiation. This is why it is much more efficient for the economy to have firms and business where it is a certain individuals trade to do the negotiating.