1. Standard SSEF6a- Define productivity SSEF3a-Give examples of Specialization SSEF6b-Explain how investment in equipment and technology leads to economic growth

2. Economic growth Our economy grows when the nation’s output of goods and services increases overtime. Productivity is the most important factor in growth.

3. Productivity A measure of the amount of output produced by a given amount of input

4. Remember: Input vs. Output OutputInput The result of input. The final good or service The amount of work or other productive resources that go into producing a product Individual output: # of goods produced/total time worked = output per worker

5. Productivity Producers reduce cost and earn a higher profit by increasing their productivity.

6. 4 Productive Resources AKA: Factors of Production These are the four elements of any business. Business want to maximize the use of productive resources. LandLabor Capital Entrepreneurship

7. 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.

8. Specialization I love Lucy- chocolate factory

9. 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

10. Questions: Think about your pizza making group… 1. Did you produce more by yourself or with your group? 2. Why do you think factories use specialization? 3. How does specialization increase productivity?

11. Benefits of specialization Increased production and business growth Economic Growth Higher Productivity Higher profits and business growth Specialization Increased production and higher productivity

12. Human Capital Investment Human capital is the main contribution to productivity Human capital is a measure of the economic value of an employee's skill set Investment in Education pays off in the long run

13. Education Investment Pays