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Difficulty: MediumDivision of Labour and Specialization

A cashew processing factory in Enugu assigns separate groups of workers exclusively to cracking shells, peeling kernels, grading, and vacuum packaging. Although output per worker initially increased, management realizes that further division of operations is constrained because the seasonal supply of raw cashews limits total production volume. Which factor primarily restricts the further application of division of labour in this enterprise?

  1. The extent of the market and raw material availabilityAnswer
  2. B
    The accumulation of internal diseconomies resulting from worker boredom and monotony
  3. C
    The absence of external economies of scale within the localized agricultural sector
  4. D
    The regression of the enterprise from indirect production back to direct subsistence production

Answer

The extent of the market and raw material availability
The correct answer correctly identifies that division of labour depends on the extent of the market and the volume of raw materials available. When supply or market demand is limited, further splitting tasks becomes economically unviable because workers cannot be kept continuously occupied on specialized micro-tasks.

Step-by-Step Solution

1
Analyze the operational constraint described in the factory scenario.
The factory has implemented division of labour across specific tasks (cracking, peeling, grading, packaging), but cannot subdivide further due to limited seasonal supply.
Technical division of labour requires a sufficient scale of production to justify assigning workers to micro-tasks continuous over time.
2
Evaluate economic principles governing the limitations of specialization.
Adam Smith's principle states that division of labour is limited by the extent of the market and production volume.
When market size or raw input volume is inadequate, hyper-specialized workers remain idle, making further division inefficient.

Key Concept

Limitations of Division of Labour (Extent of the Market)
Estimated Time:1m 15s
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Topics

Division of Labour and Specialization

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