Production and Growth Flashcards

Flashcards based on lecture notes about production and growth in economics.

Economics

The science of scarcity focused on achieving high standards of living.

Adult literacy rate in the UK

High, almost 100%.

GDP per capita, life expectancy, and adult literacy in Mexico

$11,410, 76 years, 92%.

GDP per capita, life expectancy, and adult literacy in Mali

$1,130, 50 years, 46%.

Principle number eight in chapter one

A country's standard of living depends on its ability to produce goods and services.

Productivity

The average quantity of goods and services produced per unit of labor input.

Capital Y

Real GDP (quantity of output produced during a given year).

Capital L

Quantity of labor.

Physical capital (K)

The stock of equipment and structures used to produce final goods and services.

Human capital (H)

The knowledge and skills workers acquire through education, training, and experience.

Natural resources (N)

Inputs used in the production of goods and services, such as land and mineral deposits.

Technical knowledge or know-how

Society's understanding of the best ways to produce goods and services.

Production function

A graph or equation showing the relationship between outputs and inputs in an economy.

Output per worker depend on

Output per worker depends on the level of technology, physical capital per worker, human capital per worker, and natural resources per worker.