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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

A consultant works for Chapter 1, Problem 3SCQ, A consultant works for per hour. She likes to eat vegetables, but is not very good at growing them. per hour. She likes to eat vegetables, but is not very good at growing them. Why does it make more economic sense for her to spend her time at the consulting job and shop for her vegetables?

To determine

How does it make more economic sense that a consultant working for $200 per hour should rather spend her time at the consulting job and shop for vegetables, than growing them herself?

Explanation

Adman Smith the author of The Wealth of Nations introduced the concept of division of labor in 1776, which clearly explains that why the consultant should spend time at the consulting job and shop for vegetables, rather than growing them herself. As per this concept, the ideal way of producing any good or service is by dividing the number of tasks amongst different workers instead of getting it done by the same person.

When the consultant will buy the vegetables, she can easily utilize her time and skills in the job she is more specialized at. This type of division of labor gives a comparative advantage to the consultant and helps her to perform at her utmost efficiency...

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