What does division of labor refer to?

Division of labor refers to the process where work is broken down into a number of separate tasks that are performed by different workers. This approach allows for specialization, where each worker can focus on a specific task. As a result, productivity typically increases because workers become more skilled and efficient at their designated tasks. By dividing labor in this manner, industries can produce goods and services more efficiently than if a single worker were to manage all tasks. This concept is essential in economics as it explains how efficiency and output are enhanced in production processes.

Understanding this principle also highlights why the other options do not adequately capture the meaning of division of labor. Tasks being assigned arbitrarily lacks the systematic approach inherent to division of labor, unionization of workers refers to collective bargaining and worker rights rather than task specialization, and the combination of businesses into one describes mergers or acquisitions rather than the subdivision of labor tasks within production activities.