CMA Foundation · Fundamentals of Business Economics and Management · Means of Production
According to Adam Smith's pin factory illustration, which of the following is NOT cited as a reason why division of labour raises productivity?
Equalisation of wages across all workers is not cited by Adam Smith. His pin factory example credits productivity gains to greater dexterity of workers, time saved in moving between operations, and inventions of machines. Wage equality has no role in explaining the output gains from division of labour.
- AIncrease in dexterity of each worker
- BSaving of time lost in passing from one operation to another
- CInvention of machines that ease labour
- DEqualisation of wages across all workersCorrect
Explanation
Smith attributed higher productivity to greater dexterity, saving of time between tasks, and the invention of machinery. Equal wages for all workers was not one of the reasons. So the equal-wage option is the one not cited.
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