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Adam Smith Division Of Labour Summary

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Adam Smith is of the opinion that division of labor increases productivity. But how does that happen. Smith argues that division of labor is advantageous because it increases the know-how of performing a task and makes possible specialization in the long run. It is specialization that increases production because workers who had assumed duty in a certain division perform their task repeatedly. In that way, they can identify the one best method of performing that task more conveniently and in the shortest time possible. At last, what we get is increased productivity using the same number of persons and the same amount of time. This is how the division of labor is associated with increased productivity according to Adam Smith. People will always …show more content…

This is because per capita measure is the measure of an approximate of individual contribution to the GDP. It can represent individual contribution and then provide an objective figure. It can help in determining the average income that suits individuals and can guide the relevant authorities in formulating policies regarding minimum wage. Well-being on individuals is based on a personal income level, and for that level to be improved, the government has to determine the approximate contribution per individual. However, the method suffers from its setbacks because in any capitalist economy, contribution to the national growth and wealth distribution is never fair. Wealth is concentrated on a few super-rich while the majority of the people are the middle class and the …show more content…

This is because people are happy when they get what they need, and they can pay for their needs. But according to the economic principles, resources are scarce while the human needs are unlimited. No amount of resources can satisfy all the needs of a human being. Being happy on the other hand does not mean having all that you want but refers to the satisfaction with what you have. Income of individuals is the element that enables people to acquire what they need. To assure happiness, at least, people have to cater for basic and some common luxury. The level of happiness, however, may differ depending on an individual level of income with high-income earners suggesting increase happiness while those are earning lesser suggesting reduced happiness. Well-Being is a subjective attribute and as such cannot be calculated using any analytical method satisfactorily and people will be happy differently despite earning the same amount of income. Not only depends on how much you earn, it depends on how you spend your

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