Title: 1.1 What Is Economics, and Why Is It Important? – Principles of Economics
Headings: 
1.1 What Is Economics, and Why Is It Important?
Learning Objectives
The Problem of Scarcity
The Division of and Specialization of Labor
Why the Division of Labor Increases Production
Trade and Markets
Why Study Economics?
Key Concepts and Summary
Self-Check Questions
Critical Thinking Questions
References
Glossary
Solutions
Answers for Self-Check Questions

Content: Second, workers who specialize in certain tasks often learn to produce more quickly and with higher quality. This pattern holds true for many workers, including assembly line laborers who build cars, stylists who cut hair, and doctors who perform heart surgery. In fact, specialized workers often know their jobs well enough to suggest innovative ways to do their work faster and better. A similar pattern often operates within businesses. In many cases, a business that focuses on one or a few products (sometimes called its “ core competency ”) is more successful than firms that try to make a wide range of products. Third, specialization allows businesses to take advantage of economies of scale, which means that for many goods, as the level of production increases, the average cost of producing each individual unit declines. For example, if a factory produces only 100 cars per year, each car will be quite expensive to make on average. However, if a factory produces 50,000 cars each year, then it can set up an assembly line with huge machines and workers performing specialized tasks, and the average cost of production per car will be lower. The ultimate result of workers who can focus on their preferences and talents, learn to do their specialized jobs better, and work in larger organizations is that society as a whole can produce and consume far more than if each person tried to produce all of their own goods and services. The division and specialization of labor has been a force against the problem of scarcity.