why are Norwegians better off than Ethiopians? 10/4/2012 9:27:00 AM
Productivity: the quality of goo=ds and services that a worker csn produce
for each hour of work
Determinates of productivity:
Production function: shows how we combine inputs to produce outputs.
H- human capital
If a production function exhibits constant return to scale, then doubling all
inputs leads to doubling of output.
Diminishing Marginal Product:
Marginal product: the extra output produced by increasing an input by 1 unit
Diminishing marginal product : the extra output produced by adding the 19 th