ECON 1915 Lecture Notes - Lecture 6: Human Capital, Production Function, Marginal Product
17 Mar 2017
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Document Summary
What makes an economy good in the lr is its ability to produce what does it bring to the table in terms of fop that can generate output. Pf has nothing to do with anything prices only in real terms. Focus on cap (k) and labor (n) Key to economy is q of stuff we have efficiency with which we can put them together (productivity: a) Our goal is to have a higher level of output/person. The production function never flattens out but it just doesn"t give us as much as a boost later because of diminishing marginal product. Why are some countries rich and some poor: has to do with equi in lr as defined by solow steady state. Ss no reason for income to be rising or shrinking a maintainable level of income: economy will not be growing or shrinking 0 growth rate. 2 factors that can influence income: forces that would increase cap/person.
