Specialization and division of labor usually increase the productivity of workers. Work individually to produce a product and then work as a member of a small group to produce the same product. Explain why more goods usually are produced when each member of the group performs a particular task in making the good. Greater specialization leads to increasing interdependence among producers and consumers. Compare the extent of specialization and interdependence of a shipwrecked sailor living on an isolated Pacific island with a family that owns a cattle ranch in New Mexico.
Labor productivity is output per worker.
Produce a product using an assembly line process and compute output per worker. Like trade among individuals within one country, international trade promotes specialization and division of labor and increases output and consumption. Explain why Canada produces relatively more ice hockey players and the United States produces relatively more baseball players. As a result of growing international economic interdependence, economic conditions and policies in one nation increasingly affect economic conditions and policies in other nations. Explain how a tariff on imported cacao beans affects the production of chocolate candy in the United States and how it affects people in cacao- growing countries.