• Card 37 / 100: Explain why, in a system with no division of labor, it is likely that most people would be living in or on the edge of poverty

    Answer:
    The division of labor greatly enhances the productivity of labor, meaning that more goods are produced per hour of labor. When people specialize and trade, there is more stuff to go around. Without the division of labor, everyone would produce his own food, make his own clothes, etc., and would be extremely poor. Sample Partial Credit Answer People would grow their own food etc.

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Capitalism: The Market Economy

Access: Public Peer Review

Attribution:  Dr. Robert P. Murphy, Lessons for the Young Economist. (Mises Institute), http://mises.org/document/6215/Lessons-for-the-Young-Economist (Accessed 04 April, 2014). License: Creative Commons BY
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