Principles of Macroeconomics / Unit 1 MAC 0005 short lesson, about 20 seconds
Why Specialization Raises Output
Captions available
The idea
Specialization raises output for three reasons: workers do what suits them best, they improve with practice, and larger scale lowers the average cost per unit.
In practice
A factory building fifty thousand cars a year pays less per car than one building a hundred.
Where people slip
The first reason previews comparative advantage; the third is called economies of scale, and it returns in unit seventeen.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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