Productivity • Output = goods and services = products • What a business produces • Inputs = labor + capital goods • What is put together to make outputs • Capital goods • Goods produced and used to make other goods and services • Labor productivity – – the amount of output (goods and services) produced per unit of input (labor) – or in other words – Output divided by input • Human capital • The quality of the labor resources that can be improved through investments in the health, education and training of workers Technological change • Bringing into production new knowledge and processes • Results in: • Improvement of or change in existing goods Technological change • Bringing into production new knowledge and processes • Results in: • The introduction of new goods or services Technological change • Bringing into production new knowledge and processes • Results in: – A different organization of the process • Increase in productivity means producing more goods and services with the same amount of resources OR • Producing the same amount of outputs with fewer inputs Bookmarks • Inputs: Construction paper, pictures, 18 inches of yarn, 1 ruler, 1 pencil, 1 pair scissors, 1 glue stick, 1 marker, hole punch (community), your labor • Outputs: 6x2 two color bookmark with picture and inspirational saying and a string with tassel attached through a hole at one end Bookmark, cont. • Working alone construct a bookmark. Record your time and calculate your productivity (Hint: it will be 1) Record it on your chart. Bookmarks, cont. • The time it took to construct one bookmark is your base time. Use this time as a constant (the amount of time you will use each time.) Now with 3 or 4 people, can you maximize your productivity? Make a plan. Predict what will happen. Record your results. Were you right? Why or why not? Bookmarks, cont. • Do it again with 7 or 8 or 9 people. Make a plan. Predict what will happen. Record your results. Were you right? Why or why not? • What factors influenced productivity? • How did the process change it? • Explain why your results were what they were.