QUESTION I Coretta leases a workshop, in which she weaves rugs from marsh grass she gathers (for free) from a nearby riverside. She finds that if she works alone for a day, she can weave two rugs. If she hires one additional worker, together they can weave 5 rugs in a day, each specializing in some of the tasks. Adding a third worker also allows for more specialization, bringing production up to 8 rugs. Adding a fourth worker adds only 2 rugs to production, because there are no more gains from specialization to be had. Hiring a fifth worker adds only one additional rug to daily production, because now the workshop space is getting crowded.