Production and Productivity Flashcards
What is production
The conversion of factors of production into goods and services
How many factors are fixed in short run production
Atleast 1
How many factors are fixed in long run production
None, all factors are variable
What are the measures of production
Total product
Average product
Marginal product
What is total product
The total ouput of what is produced
What is average product
The output per worker employed or output per unit of capital
What is marginal product
The change in ouput from increasing the number of workers by one person or adding one more machine to a process (IN THE SHORT RUN)
What is productivity
The output per unit input
How efficient people are at a task
How much is produced through resources
What is the productivity gap
The labour productivity of one country vs another, measured using an index
How to improve productivity
Increase investment in infrastrcture
Encourage business investment
Improve training and education
Improve health care
Inward migration of skilled labour
Degreulation
Boost R&D
Tax breaks on the use of new tech
Increased bank lending
Inc wages
Investment in house (factor mobility)
What are some evaluation arguments for productivity
w
It is a mix of s and d factors
Generally comes from the private sector
Rises as economy recvoerys
Depends on competition
Low R&D and innovation
Time lags
Macro conflicts
Real wages arent going up
What are flexible labour markets
Labour markets that can adjust to market chanegs
The speed and ability of a labour market to repsond to the economy
What is essential for good supply side performance
Flexibility
What factors do flexible labour markets involve
Easy to hire and fire workers
Labour is mobile
Government intervention does not distort the market
Give some characterisitcs of flexible labour markets
A skilled work foce
Flexible hours and contracts
Self emplyment
Competitiveness
Flexible pay arrangements
Non unionised work force
