ECO102H1 Chapter Notes - Chapter 9: Factors Of Production, Production Function, Longrun

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silvercat376

19 Jul 2018

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ECO102H1 Full Course Notes

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We focus on real gdp per capita (real gdp divided by population size) because we want to isolate the effect of changes in the population. Ex: other things equal, an increase in the population lowers the standard of living for the average person--there are now more people to share a given amount of real gdp. An increase in real gdp that only matches an increase in population leaves the average standard of living unchanged. Rule of 70: formula that tells us how long it takes real gdp per capita, or any other variable that grows gradually over time, to double. Number of years for variable to double = 70 annual growth rate of variable. Sustained economic growth occurs only when the amount of output produced by the average worker increases steadily. Physical capital: human-made resources such as buildings and machines. Human capital: improvement in labor created by the education and knowledge embodied in the workforce.

Related Questions

In 2013, the real GDP per capita (a measure of standard of living) of China was $6,187 and in the US it was $53,042. Thus Chinaâs real GDP per capita is approximately 12.8% of U.S. real GDP per capita. If Chinese per capita GDP grows at an average of 7%, and U.S. does it at 2%, how many years will it take for China to catch up with the United States?

[HINT: The easiest way to do this is to calculate how many âdoublingsâ are needed to catch up, and then use the relative rate of growth and the rule of 70 to find the solution ]

emeraldmallard910

A. A Chinese restaurant buys 100 cups of rice for a total of $10; they buy soy, fish and oyster sauces for a total of $20; they buy assorted vegetables for $40. They create 50 meals with these ingredients and sell each one for $5. How much does this process contribute to GDP? $70 $180 $250 $200 A country aims to double real GDP per capita in the next 10 years. This means that on average real GDP per capita must grow at ____ per year

B. A country aims to double real GDP per capita in the next 10 years. If the rate of population growth in the country is 1% per year then this means that real GDP must grow at ____ per year.

C. A country wants its real GDP per capita to grow at a rate of 2.5% per year. If the rate of population growth in the country is 1% per year and the inflation rate is 2% per year then this means that nominal GDP must grow at ____ per year.

5.5%
2.5%
4.5%
3.5%

cerisejellyfish113

Which of the following statements is true?
A) The GDP per capita has almost been constant since the beginning of the 20th century in most of the western world.
B) The average GDP per capita of a nation at a particular point of time is not the same as the income of all individuals in that nation.
C) GDP per capita is a useful to tool to study the disparities in standards of living in a country.
D) GDP per capita decreases with a decrease in population and increases with an increase in population, GDP remaining unchanged.

salmonmuskrat656

ECO102H1 Chapter Notes - Chapter 9: Factors Of Production, Production Function, Longrun

ECO102H1 Full Course Notes

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