Question

Explain how money encourages specialization, and how specialization improves everyone’s living standard.

Answer 1

Specialization refers to the method used for production whereby a firm focuses on production of goods for achieving certain degree of efficiency. Money increase competition and specialization. Thereby specialization helps to find out who is very efficient in the operations. It is also a standard on which people usually tries to use whatever possible for achieving the personalized goals. In the case of a industry, the firms which offers the products in very cheap price will get more customers. The whole market will be under that particular firm. Money can be used to compare firms. Money is a medium which can bee used to increase thee import as well as exports of the country.

Specialization increase the standard of living. The each and every individual in the society who specializes in each areas will innovate many new hings. Specialization have greater impact in improving overall standard of living. Because people who specialo9izae in the field of new technologies and also in development off technologies it ultimately i8ncrease the overall productivity. It is also beneficial for small firms as well as owners who is likely to increase the production. It is very essential for large a firm because it allows workers to perform efficiently though a benchmark is set already.