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Homework answers / question archive / Discussion Topic As you have learned in this module, consumers and producers make decisions to maximize their own well being
As you have learned in this module, consumers and producers make decisions to maximize their own well being. In the case of consumers, they try to maximize their satisfaction or utility. In the case of producers they try to maximize profits. An important concept underlying profit maximization is productivity. Usually more productivity leads to more profits. It can also lead to higher wages for workers.
Interestingly, labor productivity in the US has not been increasing as much as recently. Economists have several theories to explain this trend: aging population, slower rate of technological change, less job development in small, innovative companies to name a few. In reality, all of these factors play a part and the debate continues.
For this discussion post, please check out this data and then answer questions on GDP per hour worked (which is a measure of productivity) at the OECD (Organization for Economic Cooperation and Development) on GDP per hour worked. (Links to an external site.)Please select "table" to see data for a list of the countries.
The country that I selected is Romania. Yes, it's rate has changed. It has almost tripled over time. Its current rate as of 2019 is 146.5 from 56.6 in 2001.
It surprises me only in the fact that it has jumped so high in the past few years because there does not really seem to be a reason for it that I can see.
This compares to the US as it is much higher, almost half again as high. To be completely honest I don't rightly understand why the US GDP per hour worked is as low as it is or why Romania is so high, I would've thought it would've been the other way around.
Incentives. However incentives have to tempered with the demand for quality as well.
