1. Begin End ShowTable of Contents Lecture (6.5.2) Copyright © 2013 N.S.

2. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Table of Contents Labor Productivity “Long Run Growth” Targets “Long Run Growth” Targets Achieving Long Run Growth Increasing Productivity Physical Capital Human Capital Technology Other Factors Long Run Growth Around the World Access Prior Knowledge Set Goals New Information Activity Conclusion

3. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Complete these math problems and construct a 12-page booklet. Attach the 12 pages together (in the proper order) using a paper clip. You will have 5 minutes.

4. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Complete these math problems and construct a 12-page booklet. Attach the 12 pages together (in the proper order) using a paper clip. You will have 5 minutes. RULES AND REGULATIONS 2) Do not share materials with others. 3) Do not provide assistance to others. 4) In order for a booklet to count, all math problems must be completed with correct answers and the pages must all be attached in the proper order. 5) Credit will be given for partial booklets. 6) If you finish before the five minutes is up, look at the timer for your time. 1) Each person works individually (except for group (e), which has pairs). Start Timer Skip Timer

5. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Complete these math problems and construct a 12-page booklet. Attach the 12 pages together (in the proper order) using a paper clip. 0000102030405060708091011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859 End Timer

6. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Complete these math problems and construct a 12-page booklet. Attach the 12 pages together (in the proper order) using a paper clip. 1000102030405060708091011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859 End Timer

7. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Complete these math problems and construct a 12-page booklet. Attach the 12 pages together (in the proper order) using a paper clip. 2000102030405060708091011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859 End Timer

8. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Complete these math problems and construct a 12-page booklet. Attach the 12 pages together (in the proper order) using a paper clip. 3000102030405060708091011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859 End Timer

9. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Complete these math problems and construct a 12-page booklet. Attach the 12 pages together (in the proper order) using a paper clip. 4000102030405060708091011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859 End Timer

10. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Complete these math problems and construct a 12-page booklet. Attach the 12 pages together (in the proper order) using a paper clip. Time Up!

11. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity After the simulation is complete, we can calculate productivity and compare it with the rest of the class. In this simulation, productivity is measured in output per minute.

12. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity After the simulation is complete, we can calculate productivity and compare it with the rest of the class. In this simulation, productivity is measured in output per minute. CALCULATE DATA Output: How many booklets did you create? (If you had a partner, add both of your booklets together.) If you had partially completed booklets, estimate how complete it was to the nearest tenth. Minutes: How many minutes did you work? (If you had a partner, add both of your minutes together.) If you finished before the full five minutes, estimate how many minutes you worked to the nearest tenth. Productivity: Divide your total output by your total minutes. This number is your labor productivity. Group Average: Calculate your group’s average labor productivity. Write this number in the corresponding column in the table below. See Table

13. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity CLASS PRODUCTIVITY Record the productivities of all groups in the appropriate columns. Group(a)(b)(c)(d)(e) Productivity (Output per Minute)

14. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Group(a)(b)(c)(d)(e) Productivity (Output per Minute) PHYSICAL CAPITAL Physical capital are the resources and tools used in production, not the supplies that create the final product. What physical capital was present during this simulation?

15. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Group(a)(b)(c)(d)(e) Productivity (Output per Minute) HUMAN CAPITAL Human capital refers to the education, knowledge, training, and experience that an employee has. What human capital was present during this simulation?

16. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Group(a)(b)(c)(d)(e) Productivity (Output per Minute) TECHNOLOGY Technology refers to the level of sophistication of the means of production. What technology was present during this simulation?

17. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Labor Productivity Group(a)(b)(c)(d)(e) Productivity (Output per Minute) SUMMARIZE Some students were given minimal physical capital, human capital, and technology, while other students were given a great deal of each. Did higher levels of physical capital, human capital, and technology translate into higher productivities during this simulation? How can you tell? Each Group Was Given These Extra Resources NoneScissors Instructions Scissors Instructions Calculators Scissors Instructions Calculators Extra Worker

18. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. “Long Run Growth” Targets Knowledge 6Understand the importance of physical capital, human capital, and technology in regards to productivity. Reasoning 6Describe ways in which long-term economic growth can be promoted.

19. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Achieving Long Run Growth 1) Sustained growth occurs when productivity increases.

20. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Achieving Long Run Growth 1) Sustained growth occurs when productivity increases. 2) Productivity is real GDP divided by the number of people working. Real GDP Number of People Working Productivity =

21. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Achieving Long Run Growth 1) Sustained growth occurs when productivity increases. 2) Productivity is real GDP divided by the number of people working. Real GDP Number of People Working Productivity = 3) Real GDP per capita is real GDP divided by the population. Real GDP Population Real GDP per Capita =

22. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Achieving Long Run Growth 1) Sustained growth occurs when productivity increases. 2) Productivity is real GDP divided by the number of people working. Real GDP Number of People Working Productivity = 3) Real GDP per capita is real GDP divided by the population. Real GDP Population Real GDP per Capita = 4) When real GDP per capita increases, it means productivity has increased.

23. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Achieving Long Run Growth 1) Sustained growth occurs when productivity increases. 2) Productivity is real GDP divided by the number of people working. Real GDP Number of People Working Productivity = 3) Real GDP per capita is real GDP divided by the population. Real GDP Population Real GDP per Capita = 4) When real GDP per capita increases, it means productivity has increased. 5) Productivity increases when physical capital, human capital, and technology improve. ++

24. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Physical Capital 1) Physical capital are the resources and tools used in production.

25. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Physical Capital 1) Physical capital are the resources and tools used in production. 2) Infrastructure is the physical capital that provides the foundation for economic activity.

26. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Physical Capital 1) Physical capital are the resources and tools used in production. 2) Infrastructure is the physical capital that provides the foundation for economic activity. 3) There are diminishing returns to physical capital. Physical Capital per Worker Productivity (Real GDP per Worker) $10,000$20,000 $40,000 $30,000$50,000 $40,000$55,000

27. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Physical Capital 1) Physical capital are the resources and tools used in production. 2) Infrastructure is the physical capital that provides the foundation for economic activity. 3) There are diminishing returns to physical capital. 4) Each additional dollar of physical capital increases productivity by a smaller amount. Physical Capital per Worker Productivity (Real GDP per Worker) $10,000$20,000 $40,000 $30,000$50,000 $40,000$55,000

28. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Human Capital 1) Human capital refers to the education, knowledge, training, and experience of a worker.

29. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Human Capital 1) Human capital refers to the education, knowledge, training, and experience of a worker. 2) The quality of a country’s education system is directly tied to its productivity.

30. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Human Capital 1) Human capital refers to the education, knowledge, training, and experience of a worker. 2) The quality of a country’s education system is directly tied to its productivity. 3) Human capital generally increases productivity more than physical capital.

31. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Human Capital 1) Human capital refers to the education, knowledge, training, and experience of a worker. 3) Human capital generally increases productivity more than physical capital. 2) The quality of a country’s education system is directly tied to its productivity. 4) Increases in human capital shift the entire productivity graph up. High School Graduate College Graduate

32. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Technology 1) Technology refers to the level of sophistication of the means of production.

33. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Technology 1) Technology refers to the level of sophistication of the means of production. 2) Scientific advances make new technology possible.

34. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Technology 1) Technology refers to the level of sophistication of the means of production. 2) Scientific advances make new technology possible. 3) Research and development is how businesses turn science into useful products and processes.

35. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Technology 1) Technology refers to the level of sophistication of the means of production. 2) Scientific advances make new technology possible. 3) Research and development is how businesses turn science into useful products and processes. 4) Just like human capital, increases in technology shift the productivity curve up. 1967 Technology 2013 Technology

36. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Other Factors Physical capital, human capital, and technology are the ways in which a country increases productivity, but these factors must be present as well.

37. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Other Factors Physical capital, human capital, and technology are the ways in which a country increases productivity, but these factors must be present as well. 1) Natural resources can help increase productivity, but they play a small role in modern economies.

38. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Other Factors Physical capital, human capital, and technology are the ways in which a country increases productivity, but these factors must be present as well. 1) Natural resources can help increase productivity, but they play a small role in modern economies. 2) Property rights give entrepreneurs confidence to invest in the future.

39. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Other Factors Physical capital, human capital, and technology are the ways in which a country increases productivity, but these factors must be present as well. 1) Natural resources can help increase productivity, but they play a small role in modern economies. 2) Property rights give entrepreneurs confidence to invest in the future. 3) Only governments that are politically stable can provide confidence to business.

40. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Other Factors Physical capital, human capital, and technology are the ways in which a country increases productivity, but these factors must be present as well. 1) Natural resources can help increase productivity, but they play a small role in modern economies. 3) Only governments that are politically stable can provide confidence to business. 2) Property rights give entrepreneurs confidence to invest in the future. 4) Small amounts of government intervention keep the market operating efficiently.

41. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Long Run Growth Around the World A country’s standard of living is directly tied to its level of GDP per capita. By raising its GDP per capita, a country can help alleviate poverty.

42. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Long Run Growth Around the World A country’s standard of living is directly tied to its level of GDP per capita. By raising its GDP per capita, a country can help alleviate poverty. 1) Most of the Western World has experienced steady increases over the last 30 years. United States

43. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Long Run Growth Around the World A country’s standard of living is directly tied to its level of GDP per capita. By raising its GDP per capita, a country can help alleviate poverty. 1) Most of the Western World has experienced steady increases over the last 30 years. 2) East Asia has grown rapidly, but it still has much smaller levels than the West. United States South Korea

44. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Long Run Growth Around the World A country’s standard of living is directly tied to its level of GDP per capita. By raising its GDP per capita, a country can help alleviate poverty. 1) Most of the Western World has experienced steady increases over the last 30 years. 2) East Asia has grown rapidly, but it still has much smaller levels than the West. 3) Latin America has moderate levels of GDP per capita, but little growth. United States South Korea Brazil

45. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Long Run Growth Around the World A country’s standard of living is directly tied to its level of GDP per capita. By raising its GDP per capita, a country can help alleviate poverty. 1) Most of the Western World has experienced steady increases over the last 30 years. 2) East Asia has grown rapidly, but it still has much smaller levels than the West. 3) Latin America has moderate levels of GDP per capita, but little growth. 4) Africa has low levels of GDP per capita and low growth. United States South Korea Brazil Malawi

46. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Increasing Productivity (a)Complete this version if you feel you need the teacher to work with you on this topic. (b)Complete this version if you feel you have a fairly good understanding of this topic. (c)Complete this version if you feel this topic is easy. DIRECTIONS On the front side of this sheet, a fast food restaurant owner wants to increase her worker productivity. She has a few ideas, but not all will work. Decide if each idea will increase productivity or not. If it increases productivity, decide which factor of productivity is affected--physical capital, human capital, or technology. On the back, come up with your own ideas of how to increase worker productivity in the various businesses.

47. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. “Long Run Growth” Targets Knowledge 6Understand the importance of physical capital, human capital, and technology in regards to productivity. Reasoning 6Describe ways in which long-term economic growth can be promoted.

48. Last Slide Viewed ForwardBack End ShowResourcesTitle PageTable of Contents Copyright © 2013 N.S. Resources http://www.imf.org/external/ns/cs.aspx?id=28: Data for GDP per capita by country