Productivity and Investment

Please copy down the four questions. Watch the video on working at Google. Answer the questions. 1.What are some of the perks to working at Google? 2.How much will Google give an employee if that employee wants to buy a hybrid? 3.How many applications for employment does Google receive a day? 4.Why do think Google treats its employees so well?

GPS  Define productivity as the relationship of inputs to outputs.

Essential Question of the day …  What are inputs and outputs?

Upcoming Dates you need to know … Progress Reports go home on September 1 st (all grades due by Friday) Formative Assessment on EF 3, 4, and 5 on Thursday, September 1st Unit One test – Wed, Sept 7 th (will cover all of Econ Fundamentals)

Productivity  We measure productivity as the relationship of inputs to outputs  For a business it’s the cost of all their resources compared to their revenue  For a country it’s the cost of all of their resources as compared to their GROSS DOMESTIC PRODUCT (GDP)

Improving Productivity Increased Capital  More factories, tools, machines, etc.

Improving Productivity Improve technology  Faster machines, multi-tasking devices, machines with larger capacity

Improving Productivity Train/educate workers  Specialization, new techniques, ability to USE technology

Improving Productivity Improve entrepreneurship  Better organization of resources, motivational tools, leadership, worker morale

Headlines  HEADLINE 1: WHIRLPOOL FACTORY INCREASES PRODUCTIVITY  What are some steps the Whirlpool Factory could have taken to increase productivity?  How could this increase in productivity benefit the workers?  HEADLINE 2: U.S. PRODUCTIVITY RISES RAPIDLY FOR 6TH CONSECUTIVE QUARTER  How can rising productivity benefit workers? Producers? The nation?  Could there be some disadvantages of increasing productivity, at least to some people?  HEADLINE 3: PRODUCTIVITY LAGS FIRST THREE QUARTERS OF 93  Why is lagging productivity a problem for the nation, businesses, and individual workers and consumers?

Economic Growth

Please look at the list of inventions below. Create a list of 1 – 10 and pick what are the ten most important inventions from below. Then pick the one least important invention (beside the thermos ) Printing Press Electricity Paper Combustible Engine The internet Steam Engine Refrigeration Airplane The compass The telephone Cotton gin Assembly Line Penicillin Indoor Plumbing Gunpowder Nuclear Fission Plow Cement Air Conditioning Thermos

GPS  Give illustrations of investment in equipment and technology and explain their relationship to economic growth

Essential Question of the day …  How does technology shape economic growth?

Upcoming Dates you need to know  Progress Reports go home on September 1 st (all grades due by Friday)  Formative Assessment on EF 3, 4, and 5 on Thursday, September 1st  Unit One test – Wed, Sept 7 th (will cover all of Econ Fundamentals)

Economic Growth  For countries, we look at economic growth in terms of GROSS DOMESTIC PRODUCT (GDP)  GDP = dollar amount of all goods and services produced in an economy  What makes an economy grow?

Factors Affecting Economic Growth  High Investment in physical and human capital  Greater economic freedom  lower taxes, fewer regulations, protecting property rights  Strong Incentives to Save  Competitive Markets  Political Stability  Free Trade

Historic examples  Cotton Gin in America  Before Cotton Gin: 1 man = 1 pound of clean cotton  After Cotton Gin: 1 man = 50 pounds of clean cotton

Historic examples  Assembly Line  Before AL:.08 car frame in an hour (1913)  After AL:.67 car frame in an hour (1914)

Historic Examples  Wheat Harvesting (Bushels in 1 hour)

Two for the future …

USA Test Prep Assignments for Econ Fund 3 and 4 (Monday) and Econ 5 (Tuesday) are due at 12 pm (midnight) on Wednesday evening. No assignments will be accepted after that. If you have a technical issue … then problem solve it (that is how it works in the real world so get used to it.) No excuses.

Please write down the 4 questions below. Use the chart on the next slide to answer the questions. Thanks. 1.What is the unemployment rate for all workers in the United States? 2.What is the median earnings per week for someone with a Masters degree? 3.What is the difference in median weekly earnings between someone with a 4 year degree and someone with no high school diploma? 4.Which category has the lowest unemployment rate?

Upcoming Dates you need to know  Progress Reports go home on September 1 st (all grades due by Friday)  Formative Assessment on EF 3, 4, and 5 on Thursday, September 1st  Unit One test – Wed, Sept 7 th (will cover all of Econ Fundamentals)

GPS  Give examples of how investment in education can lead to a higher standard of living.

Essential Question of the day …  How do education and standard of living relate?

Literacy Rates CountryLiteracy Rate Bahamas95.6% Australia99% Bolivia86% US99% Sudan61% GDP per capita $25,000 $36,300 $4,000 $48,500 $2,200

USA Test Prep Assignments for Econ Fund 3 and 4 (Monday) and Econ 5 (Tuesday) are due at 12 pm (midnight) on Wednesday evening. No assignments will be accepted after that. If you have a technical issue … then problem solve it (that is how it works in the real world so get used to it.) No excuses.

Rank these countries  Country A: Argentina  Population: 37,384,816  PerCapita GDP: $12,900  Literacy Rate: 96.2% Country D: Russia Population: 145,470,196 PerCapita GDP: $7,700 Literacy Rate: 98% Country B: Japan Population: 126,771,662 PerCapita GDP: $24,900 Literacy Rate: 99% Country E: Singapore Population: 4,300,419 PerCapita GDP: $26,500 Literacy Rate: 93.5% Country C: Nigeria Population: 126,635,626 PerCapita GDP: $950 Literacy Rate: 57.1%

Economic Growth Capital Goods Consumer Goods Not 1 magical thing, combination of several factors Increasing overall productivity is key

Factors Affecting Economic Growth  High Investment in physical and human capital  Greater economic freedom  lower taxes, fewer regulations, protecting property rights  Strong Incentives to Save  Competitive Markets  Political Stability  Free Trade

Different PPC graphs can show how different variables affect an economy.

Different PPC graphs can show how different variables affect an economy (continued).  A natural disaster such as a hurricane has the effect of Case 1 on a local economy. Here, both capital (buildings and equipment) and labor are lost due to the calamity. Since the region’s production inputs are reduced, so too is its PPC, moving from A1 to A2. The region may recover over time, but the immediate effect of the disaster is to move the entire PPC inward.  Conversely, consider a local area with a booming economy; people are moving there in droves (providing labor), and businesses are investing in the area to take advantage of the increased number of consumers and potential employees. This would lead to a condition illustrated in Case 2, where the entire PPC shifts outward.

Different PPC graphs can show how different variables affect an economy (continued).  Now imagine a small town has just received a large economic development grant from the federal government. The amount of capital available to this economy has greatly increased while its labor pool remains unchanged, so a movement like that shown in Case 3 occurs. The new PPC, C2, shows how the investment will create an enhanced ability to produce capital goods. Lastly, increases in labor inputs (such as a higher number of college graduates) will lead to Case 4. Here, the boost to the labor force allows the PPC to shift from D1 to D2.