Another example may also be of use. Say there is a chef named Susan. Susan can cook 10 hamburgers in an hour. One day, she decides to go to the Hamburger Cooking School to learn how to cook hamburgers faster. When she returns to work, she is able to cook 40 hamburgers per hour by utilizing the new tricks she learned. By attending the cooking school, Susan increased her human capital and thus increased her labor productivity. It is important to remember that increases in capital can take the form of both quantity and quality increases. From these two examples, it is clear that the only way to achieve labor productivity growth is to increase the amount of capital, physical and/or human, available to workers. And in the long run, the only way for overall productivity to increase is though increases in the capital used in production. Growth level vs. growth rate
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This note was uploaded on 12/13/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.