Answer to Question #294678 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 - This is the measure of goods and services produced per factor input in an industry.

Higher Productivity results into improvement of the standards of living as it positively affects economic growth where as Low Productivity results into poor standards of living as the factor inputs are not fully employed hence poor economic growth.

B)

• Quality of resources - The quality of other non labour resources employed together with labour will affect level productivity of labour.
• Technology - When more effective technology is used together with labour, the productivity of the labour will be high.
• Quality of Labour - A workforce comprising of younger and energetic individuals maybe more productive than that comprising of older individuals.
• Quality of labour - Skilled and experienced workforce can be more productive than unskilled and inexperienced workforce.

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

A country with with a population that earn lower incomes will be associated with more diseases, poor health and shorter life expectancy. This is because the individual's access to quality medical services, health insurance covers and healthy foods is constrained.

On the other hand, a country with a population that earn higher income will be associated with less diseases, good health and longer life expectancy. This is because they have easy access to quality medical services, healthy diets and proper health insurance covers.