Division of Labor Boosts Productivity Through Specialization

Steps:

• Define division of labor as breaking tasks into specialized roles for efficiency.
• Identify its primary economic benefit: higher productivity via skill mastery and time savings.
• Evaluate options against this benefit to find the best match.
• Confirm the choice that directly aligns with productivity gains.

Why C is correct:

• Adam Smith's theory shows division of labor raises productivity by allowing workers to specialize, as in his pin factory example where output soared from 1 to 4,800 pins per worker daily.

Why the others are wrong:

• A: Self-sufficiency promotes internal completeness, reducing reliance on specialized external labor and thus limiting division.
• B: Greater flexibility often requires versatile workers, which counters the rigid specialization of division of labor.
• D: Risk reduction favors diversification across activities, not deeper specialization that could increase dependency risks.

Final answer: C