tables, a greeter at the door, janitors to clean up, and a business manager to handle paychecks and bills—not to

mention the economic connections a restaurant has with suppliers of food, furniture, kitchen equipment, and

the building where it is located. A complex business like a large manufacturing factory, such as the shoe

factory (Figure 1.4), or a hospital can have hundreds of job classifications.

FIGURE 1.4 Division of Labor Workers on an assembly line are an example of the divisions of labor. (Credit: "Red

Wing Shoe Factory Tour" by Nina Hale/Flickr Creative Commons, CC BY 2.0)

Access for free at openstax.org
1.1 • What Is Economics, and Why Is It Important? 13

Why the Division of Labor Increases Production

When we divide and subdivide the tasks involved with producing a good or service, workers and businesses

can produce a greater quantity of output. In his observations of pin factories, Smith noticed that one worker
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