Day 7 and 8. Productivity and Comparative Advantage.notebook. September 05, Review of Application Activity and Discuss Quiz Grades

Transcription

1 Warm Up: 1. Define Productivity. 2. Name one way a country can improve productivity. 3. What impact can an overall increase in productivity have on a production possibilities curve? 4. What does it mean to specialize? 5. Give an example of how people specialize. 6. What does it mean to have the absolute advantage? 7. What does it mean to have the comparative advantage? Review of Application Activity and Discuss Quiz Grades Sep 9 5:12 AM Sep 11 9:22 AM Focus: PRODUCTIVITY 1. What is it? 2. How do we improve it? 3. What impact does it have on a PPC? 4. Why do we care? Problem Set 2 #2 a. Define producvity. b. How does increased producvity lead to economic growth? c. What impact will long run improvements in producvity have on a country s producon possibilies curve? Draw it and explain. Sep 7 9:34 AM Sep 10 9:54 AM i. Jim and Tim work at a hamburger stand. Their boss believes in personal customer service. Because of this, each employee has to see an order through the enre way. Each employee must take an order, prepare the food, package the food, and serve it to the customers. Jim and Tim can each produce about 15 hamburger orders per hour. How could their producvity be improved? ii. Rebecca and Violet make handmade cloth purses. They are both very adept (skilled) at their work and have lots of orders. Currently, they have only one sewing machine in their workshop. How can they improve their producvity? iii. Lila just took a job that requires her to use Microso Access. She is not very skilled in this program and it takes her a very long me to complete any task. How could she improve her producvity? iv. Kyle has an exterminang business. He can only serve about eight households a day right now because he constantly has to return to his office to check in with his secretary in order to get informaon about recently scheduled appointments. How could he improve his producvity? Sep 10 9:55 AM Sep 10 9:56 AM 1

2 How can higher productivity influence a country's standard of living? Why do we care about productivity? Factories / Machinery Benefits of Investment Costs of Investment Technology Health Education / Training Sep 5 8:16 AM Sep 9 9:09 AM Which of the following will not increase the productivity of labor? A. technological improvements B. an increase in the capital stock C. improvements in education D. an increase in the size of the labor force E. a lower literacy rate. Technological progress allows workers to produce more: A because it increases the amount of physical capital available. B. because it increases the amount of human capital available. C. even when the amount of physical capital and human capital do not change. D. only if the amount of physical capital grows at the same rate. E. only if the amount of human capital grows at the same rate. Sep 10 2:15 PM Sep 10 2:16 PM Scenario: Focus: Specialization 1. What is specialization? 2. Why is specialization beneficial? 3. How do we know where people/individuals should specialize? Problem Set 2 #1 Sarah is a lawyer who can charge about $350 per hour. She is also an accomplished typist, capable of typing about 85 words per minute. Sarah is considering hiring Jill as a secretary to do all of her word processing. Jill is capable of typing only 35 words per minute, and would be paid approximately $15 per hour. Should Sarah hire Jill??? Sep 10 9:59 AM Sep 9 9:18 AM 2

3 Why do people and countries specialize and trade? Assume people didn t trade. What things would you have to go without? Everything you don t produce yourself! (Clothes, car, cell phone, bananas, heath care, etc) The Point: Everyone specializes in the production of goods and services and trades it to others What would life be like if cities couldn t trade with cities or states couldn t trade with states? Limiting trade would reduce people s choices and make people worse off. The Point: More access to trade means more choices and a higher standard of living. How do we know WHERE people and countries should specialize? COMPARATIVE ADVANTAGE Concept Check: Problem Set 2 #3 Sep 10 10:02 AM Sep 10 10:06 AM Per Unit Opportunity Cost Review Per Unit Opportunity Cost = Opportunity Cost Units Gained Assume it costs you $50 to produce 5 t-shirts. What is your PER UNIT cost for each shirt? Assume that instead of producing 5 shirts, you could have made 10 hats. What is your PER UNIT What is your PER UNIT OPPORTUNITY COST for OPPORTUNITY COST for each each shirt in terms of hats hat in terms of shirts given up? given up? Ronald McDonald can produce 20 pizzas or 200 burgers per hour. Papa John can produce 100 pizzas or 200 burgers per hour. Output vs. Input Problem Output Problem: Tells you how much you can produce using given resources. Input Problem - Tells you the resources needed to produce ONE unit of a good. Sep 10 10:07 AM Sep 10 1:16 PM Ronald McDonald can produce 20 pizzas or 200 burgers per hour. Papa John can produce 100 pizzas or 200 burgers per hour. Pizzas Burgers Ronald McDonald Papa John Output: Other goes Over OOO Determine who has the comparative advantage in pizza and who has the comparative advantage in burgers. Student Practice Problem Set 2 #6 A-E (don't do F) Sep 10 1:16 PM Sep 10 1:28 PM 3

4 The following figures represent the amount that can be produced with a fixed amount of factor inputs in one hour. The US needs five days to complete one helicopter and ten days to complete one fighter jet. Great Britain needs ten days to complete one helicopter and ten days to complete one fighter jet. Bananas Sugarcane Jamaica Puerto Rico US Great Britain Time to complete one Time to complete one helicopter fighter jet Input or Output Problem? Output Problem: Tells you how much you can produce using given resources. Input Problem - Tells you the resources needed to produce ONE unit of a good. Sep 10 1:29 PM Sep 10 1:34 PM The US needs five days to complete one helicopter and ten days to complete one fighter jet. Great Britain needs ten days to complete one helicopter and ten days to complete one fighter jet. Time to complete one Time to complete one helicopter fighter jet US 5 10 Great Britain Student Practice: Problem Set 2 #4 Input: Other Goes Under I.O.U. Determine who has the comparative advantage in each. Sep 10 1:34 PM Sep 10 1:50 PM Mowing Lawn (time it takes to complete ONE Lawn) Trimming Lawn (time it takes to complete ONE lawn) Clyde 60 minutes 40 minutes Bonnie 75 minutes 90 minutes Input or Output Question? Number Caught per Day Deer Antelope Henry 4 6 John Months to Produce One Car Plane Canada 8 10 Japan Acres to Produce 100 Bushels Corn Rice Henry 9 3 John 8 2 Sep 10 1:53 PM Sep 10 1:59 PM 4

5 Absolute Advantage? Number Caught per Day Deer Antelope Henry 4 6 John Months to Produce One Car Plane Canada 8 10 Japan Acres to Produce 100 Bushels Corn Rice Henry 9 3 John 8 2 Comparative Advantage? Number Caught per Day Deer Antelope Henry 4 6 John Months to Produce One Car Plane Canada 8 10 Japan Acres to Produce 100 Bushels Corn Rice Henry 9 3 John 8 2 Sep 10 1:59 PM Sep 10 1:59 PM Terms of Trade Quantity of Coconuts 30 Tom's Production Possibilities Quantity of Coconuts Hank's Production Possibilities 20 40Quantity of Fish 10 Quantity of Fish Sep 10 1:55 PM Sep 10 1:57 PM Fish Coconuts Tom Hank Practice: Problem Set #6 part F #7, #8 Sep 11 9:29 AM Sep 10 1:53 PM 5

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7 Attachments PPC Warmup.docx