Lesson 6 - Productivity and different types of goods Flashcards
Define the term consumer goods?
They are goods that are not used to produce other goods. Consumer goods are used or consumed, they do not aid in further production.
Give an example of a consumer good?
A burger
Define the term capital good?
Goods that are used to produce consumer goods. Capital goods are goods which make other goods.
Give an example of a capital good?
Machinery
When we try to grow the economy, what type of good is focused on?
Capital good
What does production involve?
Converting inputs into outputs
During production, what are the four types of inputs?
Land
Labour
Capital
Enterprise
After inputs, what is the next stage of production?
Making parts and assembling goods
After parts are assembled and goods are made, what is the next stage of production?
Output - Making parts and assembling products
Define the term productivity?
A way of measuring how efficiently a company or economy is producing its output.
Productivity is measured as output per unit of what?
Input employed
What is the equation for productivity rate?
Output ÷ Input
What is the equation for productivity per worker?
output produced ÷ number of workers
What is the advantage of increased productivity?
The firm has lower costs per unit meaning it it able to lower prices
