Standard

•SSEF6a- Define productivity•SSEF3a-Give examples of Specialization•SSEF6b-Explain how investment in

equipment and technology leads to economic growth

Economic growth•Economic growth = when the

nation’s output of goods and services increases overtime.

•Productivity = most important factor in growth.

•Productivity = A measure of the amount of output produced by a given amount of input

Remember: Input vs. Output

• Input = The result of input. The final good or service

• Output =The amount of work or other productive resources that go into producing a product

• Individual output = # of goods produced ÷ Total time worked

Productivity•Producers reduce cost and earn a

higher profit by increasing their productivity.

4 Productive Resources

• AKA: Factors of Production

• These are the four elements of any business.

• Business want to maximize the use of productive resources.

Land Labor

Capital Entrepreneurship

Profit

•Profit= Money producers make after costs are all paid

•Producers want to make as much money as possible by selling the goods and services they produce.

Specialization and Division of labor

• Division of Labor is when workers perform specific tasks

Division of Labor

• Specialization takes place when any of the 4 factors of production perform specific tasks

Specialization

Benefits of specialization

Increased production and business growth

Economic Growth

Higher ProductivityHigher profits and business growth

SpecializationIncreased production and higher productivity

Human Capital Investment

•Human capital:▫is the main

contribution to productivity

▫a measure of the economic value of an employee's skill set

▫Investment in Education pays off in the long run

Education Investment Pays

9-12 no diploma

High School Grad

Some College

Associates

Bachelor

Master

Doctorate

0 50,000 100,000 150,000

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