Download What is productivity? - Economics-This website is dedicated to the

What is productivity in
economics?
By: Erika Gomez 1st period
To understand productivity you must
first understand economics…
 Economics
is the social science that
studies economic activity to gain an understanding
of the processes that govern the production,
distribution and consumption of goods and services
in an economy.
 In
other words, economics is the study of how
people try to satisfy unlimited wants with careful use
of scarce resources.
So, What is productivity?

A society benefits when scarce resources are used efficiently;
this term is referred to productivity.

Productivity is an economy’s way of producing goods and services
(outputs-what you got out of it) using capital inputs (such as
machinery and land) and labor inputs. (what you put into it)

Productivity is the ratio of the volume of output to the volume of
inputs. It measures how much output is creating per unit of input, that
is:
Productivity=Output/Input
(How much you get out vs. how much you put in)
time/money/resources/amount

So is productivity even that
important?



Yasssssss gurl! In economics productivity plays a key role, by
measuring and determining the economic performance and
well being of society’s citizens.
If a country were to have higher productivity (making more with
less) there would be higher living standard that more people
can afford. This allows a society to have more options to choose
from. A persons wellbeing can be increased by using the scarce
resources we’re saving and capital to create other things. Like
paying for quality education, better roads, and making a safer
communities because we can afford too. Also improving well
being standards and environmental standards. Wouldn’t it be
nice to have everything we wanted?
Productivity characterizes the smart choices of savings and
investments a society has versus the current consumption. If we
can create higher productivity it can compete with competitive
markets, products, open a new door for trade, and creates an
increasing amount of new technologies, products, and
processes. Because we always want to be better, faster, and
stronger. A society this efficient attracts and calls for highly
skilled and creative people. These are the successful societies
that attract and retain people, ideas and capital. (sounds like
the perfect place to live in)
What contributes to
productivity?
Productivity goes up whenever more output
can be produced while using the same amount
of resources.
(High productivity means that a large amount of
output is produced with little input.)
Growth in productivity can come from either:
•Human capital
•Division of labor
•Specialization
•Economic interpendence
Human Capital




A huge investment in productivity is human
capital.
Human capital is the sum of a workers skills, ability,
health, knowledge, and motivation to create
value in performed labor.
Government can “invest” in human capital by
providing health care and education. Just as you
can invest in your own education like finishing high
school and then going to college.
People and businesses invest in programs that can
help and improve the skill level their workers have,
making an investment so the later outcome can
be higher.
Division of labor
 The
division of labor divides work into
separate tasks so an individual can
complete a specific type of work more
efficiently.
 This increases productivity because a
worker can get more done, doing a
specific job rather than trying to complete
several different tasks.
Specialization
Specialization happens when factors of
production work/perform tasks they can do
better than others.
 The division of labor makes specialization
possible because you can place a worker
somewhere where they do best; while still
dividing the work area.
 This can help increase
productivity while still maintaining
the same resources and labor you
have but using them more efficiently.

Economic interpendence



Last, but not least it economic interpendencewhich means our economy relies on others for
trade while others rely on us to provide most of the
products and services we consume.
Meaning if something were to happen here it
would dramatically impact another part of the
world.
This doesn’t necessarily mean that this is a bad
thing, because if productivity gets higher and we
make more for less. The income coming from that
makes up for the fact others have to rely on
us(because people cant efficiently make their
own product) and pays for the loss of selfsufficiency.
These factors can all help to
create more efficient
productivity.
 Wouldn’t
you want to make more with
less…………?