MGTA02H3 Chapter 2: Chapter 2.docx
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MGTA02H3 Full Course Notes
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Productivity: a measure of efficiency that compares how much is produced with the resources used to produce it. Quality: a product"s fitness for use in terms of offering the features that consumers want. Productivity varies from nation to nation because of many factors: technologies, human skills, economic policies, natural resources, traditions. Canada"s competitiveness is a concern because we have been living off our rich diet of natural resources. Canada needs to start emphasizing innovation and develop a more sophisticated mix of products if it hopes to be successful in international markets. A country that improves it ability to make something out of its existing resources can increase wealth of all its inhabitants. A decline in productivity shrinks a nation"s total wealth. Manufacturing productivity is higher than service productivity because since the service sector focussed more on hands-on activity that machines couldn"t replace, it would be reo difficult to increase productivity in services. (baumol"s disease)
