# SOCI 235 Study Guide - Fall 2018, Comprehensive Midterm Notes - Canada, Patent, Organisation For Economic Co-Operation And Development

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12 Oct 2018
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SOCI 235
MIDTERM EXAM
STUDY GUIDE
Fall 2018
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SOCI 235 Technology and Society
Introduction Lecture: Growth in Productivity Sept. 6th
Graph #1
Shows growth in productivity over time in the U.S., U.K., and Canada over time
Raises the question what do we mean by productivity, and how can we measure it?
UK is highest in 1870, gradually becomes lowest
U.S. reaches the same level of productivity GDP per person an hour as the U.K. in 1890
Hour of work in 1978 reaches \$8.50 dollars of goods produced in the U.S.
Canada relatively the same trend as the U.S., overtakes the UK in 1950, then becomes
the middle ground, tends to lag behind a bit between 1973 and 1978
Suggests increments in living standards
Productivity measure of how much output you get from some input ratio of output to input
Labour productivity output per unit of labour input where the input is usually hours
but may be employees
o How to improve productivity of employees better technology, machinery,
equipment (also incentive, innovation, logistics)
o Labour productivity may rise because there are additional inputs these
o Not adequately measured because it does not take into account the productivity
enhancement of commercial equipment
Total factor productivity output per unit of all inputs including both labour and
capital
o Rises in productivity will usually be associated with increases in living standards
Measurement why does it matter?
GDP compare productivity by dividing GDP / inputs = measure of GDP per capita or per hour
of work (this is a measure of productivity)
Why does GDP per hour of work matter? Living standards, interested in that outcome
eause its ho e get etter off
GDP can be measured by summing these:
1. Expenditures (total expenditures required to buy final output) = consumption +
investment + government + net exports
2. Income = wages + rent + profits + interest
Is real GDP a good measure of living standards?
1. Government expenditure
a. Government spends \$ on roads, hospitals, seators salary, hokey area to
attract tourism to Quebec City
b. When gov. spends \$, the purchases are involuntary; people are compelled to pay
taxes, then gov. uses those tax dollars to buy roads, build arenas, etc.
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c. Article by Tyler Cowan difficulty with government expenditures is that there is
no limit to what they can supply, the government is deciding on behalf of what
the people want
d. When gov. makes decision to spend money, this is not validated by private
consumers
e. How do we value government expenditures in GDP calculations at cost
f. Stresses that the U.S. wastes a lot of government expenditures
g. As the share of government spending rises, so GDP tends to overstate living
standards
2. Private expenditure
a. Some expenditures cannot be viewed as improving well-being ex. gasoline
used while in a traffic jam
b. Mortgage after its ee paid off, hoe oership doest sho up i GDP
totals but this is a huge and major source of well-being/living standards
c. Improvements in quality Hedonic indexes: take quality improvements into
account by 1) when same good is available on market distinguished by whether
or not a quality improvement is present the price margin between the good with
the quality improvement and the good without it can be treated as the value of
the improvement and 2) subsequent inflation adjustments can be offset by the
value of additional quality contained in successive versions of the good
d. Expenditures on illegal activities (drugs, prostitution, bribes) Italy now includes
these expenditures in their GDP reports, U.K. has been moving towards including
expenditures on prostitution
Expenditures can have spillover’s – negative, or positive consequences to which no price is
attached, pollution is an example of a negative outcome
Issues with GDP:
1. Wasted expenditures do not always result in improved living standards
2. What happens when the mortgage is payed off?
Property is no longer generating expenditures does not have one that will be showing
up in GDP calculations
3. Capital equipment problem is that it may deteriorate, but beneficial overall
4. Research and development expenditures
Benefits are likely to be harvested years down the line to when they are made
Question is how do we deal with benefits from these expenditures in future years?
o Not very well difficult to manage, Canada incorporated RND into its GDP 2012
o RND produces a flow of benefits but not all of it does, quite a bit produces
nothing at all
Difficult to decide what to assign benefits to
5. Vice gambling, prostitution, etc.
Question of whether or not we should include vice in GDP
o How do we go about doing this?
It is still benefiting and influencing the GDP
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## Document Summary

Introduction lecture: growth in productivity sept. 6th. Living standards, interested in that outcome (cid:271)e(cid:272)ause it(cid:859)s ho(cid:449) (cid:449)e get (cid:271)etter off. Gdp can be measured by summing these: expenditures (total expenditures required to buy final output) = consumption + investment + government + net exports, income = wages + rent + profits + interest. Expenditures can have spillover"s negative, or positive consequences to which no price is attached, pollution is an example of a negative outcome. It is still benefiting and influencing the gdp. Innovations in europe in the 17th century: the waterwheel used for a range of activities: grinding grain, hammering metal, pulping cloth for paper. Idea that nature should properly be subordinated to humans world is pliable, go out and mold it: 3. Linear rather than cyclical sense of time compatible with the idea of progress, time goes on and so does progress so we can expect it to get better: 2.