Productivity Labor productivity: how much each worker produces Increases in productivity are due to: 1.Technology 2.Capital deepening: increase in amount of capital goods available per worker (more machines = more production) 3.Educated & skilled workforce 4.Other factors: loyalty to job, motivation of worker
Developing Countries Poorest Nations Developing Nations : low standard of living due to little human or physical capital What do these countries have in common?
Problems : Traditional economies –Subsistence farming: grow just enough to survive, but not to trade –Wealthy control cash crops: coffee, sugar, peanuts Human Resources: –Lack of skilled, experienced workers –Lack of education Low literacy rates
Natural Resources: –Little arable (productive)land –Lack of water or infrastructure to make it obtainable –Lack of natural resources One crop economy: only makes 1 thing thus reliant on price of just 1 product Capital Resources –Don’t have the capital to invest & can’t borrow –MicroloansMicroloans
Richest Countries – by GDP 10 Richest Developed Countries or Industrialized Nations: highest standards of living
GDP per capita Amount produced per person GDP per capita Indicates the level of the standard of living –BUT – cannot show if the wealth is evenly distributed With only 300,000 and rich oil reserves, Qatar is one of the richest nations on earth!
What is a high standard of living ? Is it money or stuff? Or is a feeling of happiness or success? Happiest Countries Murder Rate
After looking at all this data, where would you like to live? Explain.