PRODUCTIVITY n Productivity efficient use of resources using

  • Slides: 8
Download presentation
PRODUCTIVITY * n Productivity – efficient use of resources (using your resources well) n

PRODUCTIVITY * n Productivity – efficient use of resources (using your resources well) n Productivity goes up when n more output (goods) can be made with same amount of inputs (resources), or n if same output (goods) can be produced with fewer inputs (resources).

SPECIALIZATION * n Specialization – productive inputs (mainly people) do whatever task they are

SPECIALIZATION * n Specialization – productive inputs (mainly people) do whatever task they are able to do best. n Good way to increase productivity. n Division of labor n Assembly Line

HUMAN CAPITAL * n Human capital –skills, abilities, health, and motivation of people. n

HUMAN CAPITAL * n Human capital –skills, abilities, health, and motivation of people. n Can be increased; ex – education, training n Don’t get confused!!!!! n n Capital – tools and equipment Human Capital- when people are the tools

The 3 Economic Systems

The 3 Economic Systems

3 Economic Systems 1. TRADITIONAL ECONOMY: nearly all economic activity is determined by ritual,

3 Economic Systems 1. TRADITIONAL ECONOMY: nearly all economic activity is determined by ritual, habit, or custom. *Roles defined by customs of ancestors. *Skills passed from generation to generation.

3 Economic Systems 2. COMMAND ECONOMY: a central authority decides WHAT is produced, HOW

3 Economic Systems 2. COMMAND ECONOMY: a central authority decides WHAT is produced, HOW it is produced, and FOR WHO. *Economic decisions are made at the top & people are expected to follow *resource usage and production quotas are predetermined

3 Economic Systems 3. MARKET ECONOMY: people and firms (companies) act in their own

3 Economic Systems 3. MARKET ECONOMY: people and firms (companies) act in their own best interests to decide WHAT, HOW & FOR WHOM *In a M. E. people cast “dollar votes” when they buy products. This determines WHAT is produced.

Your Assignment n Create a graphic organizer that a) lists the 3 economic systems

Your Assignment n Create a graphic organizer that a) lists the 3 economic systems b) includes a short description of each c) explains who or what determines WHAT is produced in each economic system d) lists the strengths and weaknesses of each economic system (pg. 26 -27)