Question

Why would division of labor without trade not

work?

Short answer

Division of labor is attained through comparative advantage when people focus on producing what they specialize in and depend on others for rest of the goods and services. Without trade people cannot specialize and would need to produce everything by themselves.

Step-by-step solution

Step 1. Concept

Division of labor refers to the economic concept of separating then production process and assigning tasks to workers based on what they specialize in.

Step 2.Explanation

At the point when an individual can create something at a lower opportunity cost than others, they are said to enjoy a similar benefit in the development of that great or administration.

When people focus on the producing the good or service they have a comparative advantage in and depend on others for purchasing other goods and services, they can achieve specialization.

But when there is no trade, the person cannot exchange the good they specialize in with the good they do not specialize in. Thus, labor would not be divided and every person would have to do all their work by themselves.

Step 3. Example

Suppose, in an economy with trade, person A specializes in farming while person B specializes in making clothes. Person A can focus on producing food and can purchase clothes from person B. But if trade is banned this exchange cannot happen, so labor would not be divided according to specialization.