ECON 261 Chapter Notes - Chapter 12: Human Capital, High Standard Manufacturing Company, Investment Goods
Document Summary
Y = real gdp = quantity of output produced. Improving the health and education of the workforce will improve human capital per worker: an important feature of capital is that it is a produced factor of production. In per-worker terms, an increase in n / l causes an increase in y. It means any advance in knowledge that boosts productivity (allows society to get more output from its resources: the production function, production function= a graph or equation showing the relation between output and inputs: F ( ) is a function that shows how inputs are combined to produce output. Y = a f(l, k, h, n: a multiplies the function f( ), so improvements in technology (increases in. Increasing all inputs 10% (multiplying each by 1. 1) causes output to increase by 10%: 1. 1y = a f(1. 1l, 1. 1k, 1. 1h, 1. 1n: if we multiply each input by 1 / l, then output is multiplied by 1 / l:
