Asked by Jessica Stocker on Jul 25, 2024
Verified
Adam Smith's example of the pin factory demonstrates that economies of scale result from specialization.
Economies of Scale
The cost advantages that enterprises obtain due to their scale of operation, leading to a decreased cost per unit.
Pin Factory
An example used by Adam Smith to describe the benefits of specialization and division of labor in manufacturing, increasing productivity and efficiency.
- Grasp the meaning and resulting implications of economies of scale versus diseconomies of scale.
- Recognize the role of specialization in achieving economies of scale.
- Understand the importance of Adam Smith's work in recognizing the role of specialization and economies of scale within economic theory.
Verified Answer
KB
Kyara BeatrizJul 26, 2024
Final Answer :
True
Explanation :
Adam Smith's example of the pin factory illustrates how dividing the production process into specialized tasks significantly increases output, demonstrating the principle of economies of scale.
Learning Objectives
- Grasp the meaning and resulting implications of economies of scale versus diseconomies of scale.
- Recognize the role of specialization in achieving economies of scale.
- Understand the importance of Adam Smith's work in recognizing the role of specialization and economies of scale within economic theory.
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