Econ 4.3

Monday, April 19, 1999

Announcements: The final homework assignment is Friday. A comprehensive makeup exam that will cover exams 1-3 will be during class in 413 Kern on Wednesday, April 21 at 10:10 am. An optional review session for exam 4 will be Thursday in 112 Chambers from 6:30 to 8 pm. Exam 4 will be Friday, April 23 and will cover Chapters 16 and 19.

Lecture notes:  

Chapter 19 (cont'd)

• We can produce more of one good without decreasing the amount of the other good
• See Figure 19.1 on page 404 in the textbook
• Small changes in growth rate can make a big difference over time

The Sources of Economic Growth

• an increase in labor supply
• an increase in physical capital
• an increase in human capital
• an increase in productivity (the amount of product produced by each unit of capital or labor)

Labor Productivity

• Labor productivity refers to the output per worker; the amount of ouput produced by an average worker in one hour.

• Economic growth from an increase in labor -- more output but diminishing returns and lower labor productivity
• see Table 19.1 on page 406 in the textbook
• Employment, labor force and population growth, 1947 to 1997
• see Table 19.2 on page 407 in the textbook
• Economic growth from an increase in capital -- more output, diminishing returns to added capital, higher measured labor productivity
• see Table 19.3 on page 408 in the textbook