ECON 105 Lecture Notes - Lecture 7: Physical Capital, Opportunity Cost, Capital Accumulation

• School: Simon Fraser University
• Department: Economics
• Course: ECON 105
• Professor: Junjie Liu

Document Summary

Distinction between the level of income and the rate of growth in income is crucial. The level of income per person is a good gauge of economic prosperity. The rate of growth in income per person is a good gauge of economic progress. Productivity is the amount of goods and services produced for each unit of worker"s time. Y = real gdp = quantity of output produced. Country"s standard of living depends on its ability to produce goods and services. Productivity measures the ability to produce goods and services. As productivity increases, workers can produce more goods and services for each unit of time. The more a country produces, the more it can consume. When productivity grows rapidly, so do living standards. Determinants of productivity: physical capital per worker. The stock of equipment and structures that are used to produce goods and services: human capital per worker.