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How to increase productivity

How to increase productivity. 1. Specialization and division of labor 2. Investment in capital goods (ex. computers) 3. Investment in human capital (health, education, training). With a partner:. What is the relationship between human capital, technology, productivity and growth?

declan-harding
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How to increase productivity

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  1. How to increase productivity 1.Specialization and division of labor 2.Investment in capital goods (ex. computers) 3. Investment in human capital (health, education, training)

  2. With a partner: What is the relationship between human capital, technology, productivity and growth? Brainstorm before you write your answer.

  3. Goals of Economic System • Economic Freedom • free to choose • how to spend & save • where to work • start business • hire and fire • Economic Efficiency • Getting the most out of what we have. Not being wasteful. • Economic Equity • some measure of fairness • Examples: tax policy, minimum wage

  4. Goals of Economic System(continued) • Economic Security • Protection against economic risks to include: • stability - inflation & unemployment • safety net: • social security • welfare • Economic Growth • Producing more goods and services • Can improve standard of living: health, literacy, life expectancy

  5. Broad Social Goals • Freedom - free to choose • Efficiency-minimize waste • Equity-some fairness • Security - stability • Growth -improve living standard

  6. UtopianSociety 1. Divide into Groups of 2 • Each group rank order the goals • rank from • 1 = highest • 5 = lowest • No ties allowed • ______ Economic freedom • ______ Economic efficiency • ______ Economic equity • ______ Economic security • ______ Economic growth • Can you imagine any situations that would require a trade-off between two goals? • Can you imagine a situation where achievement of one goal enhances another?

  7. Tradeoffs • Reduce one goal, but improve another • Examples: • Higher taxes • reduce economic freedom • promote economic • equity • education • security • unemployment compensation

  8. Review productivity questions

  9. PRODUCTION POSSIBILITIES Q 14 13 12 11 10 9 8 7 6 5 4 3 2 1 A B C D Capital Goods Resources underutilized E Q 1 2 3 4 5 6 7 8 Consumer goods

  10. PRODUCTION POSSIBILITIES Q 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Unattainable A B C W D Capital Goods Resources underutilized E Q 1 2 3 4 5 6 7 8 Consumer goods

  11. PRODUCTION POSSIBILITIES Movement to the right shows growth Q 14 13 12 11 10 9 8 7 6 5 4 3 2 1 A B C Capital Goods D E Q 1 2 3 4 5 6 7 8 Consumer Goods

  12. PRODUCTION POSSIBILITIES Q 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Unattainable A B C W D Capital Goods Attainable but Inefficient E Q 1 2 3 4 5 6 7 8 Consumer goods

  13. Learnings: • PPFs show scarcity, opp. costs, trade-offs • Points inside the line are attainable, but inefficient • Points outside the line are unattainable at present • Economic growth is shown by a movement of the line to the right

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