The Effect Of Productivity And Output, And A Positive Relationship On Productivity

1040 Words Jan 27th, 2016 null Page
Answer to question 1:
Since the first quarter of 2015, labor productivity and unit labor costs have increased in the manufacturing, business, nonfinancial corporate, and nonfarm business sectors. Generally, the cause for a rise in productivity can be attributed to “changes in technology; capital investment; level of output; utilization of capacity, energy, and materials; the organization of production; managerial skill; and the characteristics and effort of the work force.” [1] In this case, there was an increase in the output per hour of all workers and a decrease in the number of hours that they have worked. Consequently, these sectors have been able to increase their annual production. Regarding the rise in unit labor costs, the employers compensated the workers for the increased output, and this causes the slight increase in costs. [1]
Productivity is a ratio of output per hour of all workers and of the number of hours they work. There is a positive relationship between productivity and output, and a negative relationship between productivity and the number of hours worked. Therefore, an increase in output will result in an increase in productivity, and if there are more hours worked this will result in a decrease in productivity (assuming the output stays the same).

Answer to question 2: Overall, an increase in productivity would mean that at any given price there are more goods and services supplied. If there was a graph shown you would see a slight shift to the…

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