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Division of labour

Workers perform individual tasks that contribute to the production of the good or service. This means that a number of workers will work together to produce a unit of a good/service. This helps to achieve greater efficiency as workers specialise in a smaller number of tasks.

This ultimately helps to increase productivity because the longer workers can carry out jobs for, the more efficient and acustomed they become towards carrying out the task in the best possible way. This then ultimately will free up workers time to carry out other tasks.

This is all based on Adam Smith's theory of specialisation regarding workers in a pin factory.

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