ECON 200 Lecture Notes - Lecture 13: Opportunity Cost, Private Good, Foreign Portfolio Investment

• School: University of Arizona
• Department: Economics
• Course: ECON 200
• Professor: Ryan Johnson

Document Summary

Average income in the united states grows by about 2% each year. Because of differences in growth rates, the ranking of countries by income changes substantially over time. Productivity is the quantity of goods and services produced from each unit of labor input. A nation can enjoy a high standard of living only if it can produce a large quantity of goods and services. Determinants of productivity include physical capital, human capital, natural resources, and technological knowledge. Physical capital is the stock of equipment and structures that are used to produce goods and services. Workers are more productive if they have tools with which to work. Capital is a factor of production used to produce all kinds of goods and services, including more capital. Human capital is the knowledge and skills that workers acquire through education, training, and experience. Is less tangible than physical capital, but has many similarities. Both raise a nation"s ability to produce goods and services.