Specialization
Is there anything you need that you do not have? Is there anything that you want that you do not have? Why? Write down your answers. When you finish this course, you will enjoy looking at them. Understanding microeconomics will give you a different perspective on how things work.
The answer to the previous questions is that most of us do not produce the things we want or need; we buy them! While it may sound obvious, we need to have a source of income to buy these things. Yet, most of us never have enough to buy everything we want.
One possible solution would be to produce all the goods we consume. Would this make sense? Most of us would have to learn how to create these items and would likely conclude that it is just not worth it. In 1776, Adam Smith introduced the concepts of division and specialization of labor in his book The Wealth of Nations.
Watch this video, which explains how the division of labor enables
workers to specialize in the tasks where they have an advantage.
Source: Foundation for Economic Education, https://youtu.be/lGe9Q4vIVko?si=8DvhXc1_ug6XlV6v
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