Specialization Enhances Firm Productivity

Steps:

• Define specialization: Workers focus on specific tasks, improving skills and efficiency.
• Link to firm benefits: Reduces time wasted on switching tasks, allowing faster production.
• Evaluate options: Identify which directly results from higher efficiency.
• Select best: Choose the outcome tied to core economic principle of division of labor.

Why D is correct:

• Specialization, per Adam Smith's division of labor, increases productivity by honing expertise, directly raising output levels without needing more resources.

Why the others are wrong:

• A: Relates to international trade advantages, not internal firm processes.
• B: May occur with growth but isn't a direct benefit of specialization.
• C: Can cause monotony, potentially lowering motivation rather than increasing it.

Final answer: D