ECO 304L Study Guide - Quiz Guide: Sae Steel Grades, Gdp Deflator, Factors Of Production

• School: UT-Austin
• Department: Economics
• Course: ECO 304L
• Professor: M O S T A S H A R I, S H A L A H

Document Summary

Eco 304l t t t other t t t. The aggregate production function shows that real gdp is determined by total factor productivity, and the quantity of inputs used in the production process (labor, capital, human capital, natural resources) Two common measures of productivity are total factor productivity (a in the above equation) and labor productivity (y/l). Mpl decreases when l increases and mpk decreases when k increases. Property 1 the production function is increasing in its arguments. Property 2 the marginal product of a factor decreases as its quantity increases (cid:498)diminishing marginal products(cid:499) Property 3 the marginal product of a factor increases in the quantity of each other factor (factor. 4a a positive change in tfp increases output (short run production function rotates up) 4b both mpk and mpl increase (shift right) More capital or more labor produces more output (positive marginal products) More capital increases mpl, and more labor increases mpk complementarity)