Econ 4.3

Wednesday, April 21, 1999

Announcements: 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:  

• Production function defines relationship of inputs and outputs
• Constant returns to scales -- if you double inputs, you double outputs
• 2 classes of input -- labor and capital
• Fixed Private Non-Residential Net Capital Stock, 1960 to 1995 (billions of 1995 dollars)
• See Table 19.4 on page 408 in the textbook
• Years of School Completed by People over 25 Years Old, 1940 to 1996
• See Table 19.5 on page 409 in the textbook

Productivity of Input

• The productivity of an input is measured as the amount of output produced per unit of the input

Inventions and Innovations

• An invention is an advance in knowledge
• Innovation is the use of new knowledge to produce a new product or to produce an existing product more efficiently

• Growth of Real GDP in the United States, 1871 to 1997
• See Table 19.6 on page 412 in the textbook
• The US leads ahead of France, W. Germany, Japan and Britain in level of GDP per person
• Sources of Growth in the United States, 1929-1982
• See Table 19.7 on page 413 in the textbook