Division of Labor & Productivity
Division of labor occurs when
Different parts of the production of a good are assigned to different people.
To successfully barter, what must exist?
A coincidence of wants
The customers drive the economy = ______ economy.
Market
Craftsperson
What ways can you increase productivity?
Investing in capital goods.
Investing in human capital.
Organizing the labor force.
Money makes ______ easier.
Trading
The central authority decides = ______ economy.
Command
If a company wants to mass produce their goods, should they go with the craftsperson or specialist method?
Specialist because the labor would be divided among the workers.
What are human capital & capital goods examples?
Human capital - training
Capital goods - machines and tools to make production easier
Three functions of money are…
Medium of Exchange
Store of Value
Unit of Account
The oldest members decide = ______ economy.
Traditional
A farmer hires workers & buys a tractor — how is productivity increased?
Through investment in capital goods (tractor) and organizing labor (workers).
Name 3 characteristics of money.
Durable, portable, divisible, scarce/limited, generally accepted.