Specialization: 

Specialization is a very important concept in economics. People and firms(and nations) can get more if they specialize in certain activities and then trade with one another to acquire the goods and services that they desire than if they do everything themselves. Each individual, firm or country can specialize in some activities, earn an income and then trade their output for other goods and services. The rule of specialization is: the individual (firm, region or nation) will specialize in the production of the good or service that has the lowest opportunity cost. Specialization and trade enable individuals, firms and nations to get more than they could without specialization and trade.

Like the division of labor, specialization generally comes about because it is discovered (usually by trial and error) that the individuals or groups concerned can increase their productivity (and hence, under a market economy, their incomes) through greater specialization according to the principle of comparative advantage. The benefits of specialization extend beyond individual workers as well. Firms that specialize in their particular products can produce larger quantities to sell. Those firms and their employees use the proceeds from the sale of those goods to buy needed goods produced by other workers and companies.

By specializing in the activities in which the opportunity costs are lowest and then trading, each country or individual will end up with more than if each tried to produce everything. In the economic sense, the social phenomenon of individual human beings or organizations each concentrating their productive efforts on a rather limited range of tasks. Specialization entails focusing on a narrow area of knowledge or skill or activity. It involves a person's or an organization's adapting for the unusually effective or efficient performance of some particular function, often at the expense of the individual's or organization's ability to perform most other functions for themselves, which are then necessarily left to others with more appropriate skills or talents or abilities.