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The story, I, Pencil, demonstrates many economic principles. Having every part of the pencil made in different areas around the world, trees grown in Northern California and
Oregon, graphite mined from Sri Lanka, and a rubber like product for the eraser from Indonesia to name a few, illustrates specialization. Each area has comparative advantage for making what they produce. The story also illustrates division of labor. The parts of the pencil are divided among groups of people to make. The people who mine the graphite are better at it then the people who cut down the trees because they have done the task over and over again. The graphite worker could also cut down the trees but he would lose time moving from one task to another and wouldn’t have the experience and skill as the worker whose career is to cut down trees. Therefore by dividing the labor and allowing people to do what they are good increases productivity. All of these people working “together” to make a pencil......

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Approximate Word Count: 301
Approximate Pages: 2 (250 words per double-spaced page)

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