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.