Chapter 14

Question 1

Productivity?

Answer 1

How efficiently goods and services are produced,

Output volume / input volume

Question 2

How encourages productivity growth?

Answer 2

Investment, enterprise, innovation, competition…

Question 3

1. Investment in education, training

Answer 3

Creates more productive, efficient workers
Enables them to use capital equipment efficiently
Be creative and implement innovations

Question 4

2. Investment in capital and infrastructure

Answer 4

More equipment, can produce more (using resources more efficiently).

Question 5

3. Enterprise

Answer 5

Determinant of a firms ability to improve efficiency, adapt to market changes, recognise opportunities…

Question 6

4. Competition

Answer 6

Creating incentives - ensures resources are allocated efficiently.

Question 7

Allocative efficiency?

Answer 7

Opp cost and waste.

Question 8

Technical efficiency?

Answer 8

The ability to produce more output from a given input.

Relationship between output and input.

Question 9

Productivity trends?

Answer 9

• labour productivity improved in the 1990’s,
• 2000’s had a relative slow down - red tape, government laws, labour laws, bottle necks, GFC and exogenous factors
• last 5 years within our economy, there has been improvement due to the focus on efficiency

Question 10

Dynamic efficiency?

Answer 10

To adapt overtime.

Question 11

MER?

Answer 11

Introduced in the 1970’s, had a significant impact in relation to reducing the barriers to trade and promoting efficiency within an economy

Question 12

Fiscal policy?

Answer 12

Use of government revenue and expenditure to achieve economic objectives.

Question 13

How microeconomic reform can increase productivity?

Answer 13

Changing economy-wide policies, makes a better use of scarce resources