1. What is productivity in economics? By: Erika Gomez 1 st period

2. 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.

3. 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 

4. 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)

5. 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

6. 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.

7. 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.

8. 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.

9. Economic interpendence  Last, but not least it economic interpendence- which 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 self- sufficiency.

10. These factors can all help to create more efficient productivity.  Wouldn’t you want to make more with less…………?