Answer to Question #294663 in Microeconomics for Sunflower

Question

Explain what is productivity and how productivity is related to the standard of living? (4 marks)

B. Describe the FOUR (4) determinants of labor productivity in a particular country. (8 marks)

C. Explain the causal link between wealth and health. Describe the poverty vicious circle where poor countries are poor because their populations are not healthy, and their populations are not healthy because they are poor (cannot afford adequate healthcare and nutrition). (8 marks)

Answer 1

A) Productivity is a measure of how much goods and services can be produced per unit input.

Higher Productivity translates to improved standards of living due to the increased economic growth. Lower productivity leads to poor standards of living.

B)

1. Availability of resources- When resources are easily available, the labour will be fully employed into production hence increasing productivity.
2. Quality of labour- Skilled and experienced labour is more productive compared to unskilled and inexperienced labour force.
3. Age - When majority of the labour force is young and energetic, the labour will be more productive than older labour force.
4. Availability- When labour is easily available, then it can be employed to the maximum thus improving productivity

C) There is a positive correlation between good health and wealth.

A population earning higher income tends to have less diseases and general good health as they have access to health insurance covers, healthy eating and quality health services.

A population with lower income are associated with more diseases and general poor health as their access to health insurance covers, healthy eating and quality health services is limited.