Specialization—the division of labor—enhances productivity and efficiency by:

• A. reducing the need for any form of trade between individuals or nations
• B. allowing workers to focus on tasks they perform best, leading to increased output
• C. eliminating the use of capital in the production process
• D. ensuring that all workers perform every task equally

Answer: (B)

Verified step by step guidance

1. Understand the concept of specialization in microeconomics: it refers to individuals or entities focusing on a narrow range of tasks or production activities where they have an advantage or higher efficiency.
2. Recognize that specialization leads to increased productivity because workers or producers become more skilled and efficient at the specific tasks they perform repeatedly.
3. Note that specialization does not eliminate trade; rather, it often increases the need for trade because individuals or nations exchange goods or services they specialize in for others they do not produce themselves.
4. Understand that specialization does not eliminate the use of capital; capital is still necessary to support production processes, regardless of specialization.
5. Conclude that the key benefit of specialization is allowing workers to focus on tasks they perform best, which leads to increased output and overall economic efficiency.