Lecture #6 - Lecture#6 Economic Growth refers to an...

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Lecture #6 Economic Growth: refers to an increase in per capita income Economic Development: a broader improvement in the quality of life Gross Domestic Product (GDP): the total market value of all goods and services produced within a country in a given year. Equals sum of consumer, investment and government spending plus the value of exports minus the value of imports (GDP = C + I + G + X – M) Gross National Income (GNI) often called Gross National Product (GNP): the total market value of all goods and services produced within a country in a given year plus income earned by its citizens abroad minus income earned by foreigners from domestic production. Economics of Supply -A production function shows output for any given quantity of inputs used in its production. -Its slope is the Marginal Physical Product (MPP) diminishing marginal returns to inputs in production. -Profit maximization occurs where the value of the marginal product (VMP) of each input i.e. product price times its MPP, equals the input price.
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