BU204_03_Johnson_Jennifer_Unit_5_Homework prof corrections

BU204_03_Johnson_Jennifer_Unit_5_Homework prof corrections...

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Unformatted text preview: Jennifer Johnson Kaplan University BU204- 03 Macroeconomics Anthony Brogna Unit 5 November 16, 2010 Key Terms Definitions GDP per Capita: measures the total value of an economys production of final goods and services as well as the income earned in that economy in a given year. (Krugman & Wells, 2009, p. 266). To me this means the approximation of the value of goods produced per person in the country, equal to the country's GDP divided by the total number of people in the country. Real GDP per capita is the measure of the standard of living, the effect of changes in population. Read more: http://www.investorwords.com/6827/GDP_per_capita.html#ixzz15V8V6Dvt Labor productivity : refer either to output per worker or, in some cases, to output per hour (Krugman & Wells, 2009, p. 230). To me Labor production is simply how much work someone can do within a given amount of time. For example, you might measure the amount of phone calls a worker can take or widgets they can put together. Labor productivity means the quantity of output divided by the labor hours worked. Human capital or education can increase labor productivity and having more capital can also increase productivity. Diminishing returns to Physical Capital : holding the amount of human capital per worker and the state of technology fixed, each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity. (Krugman & Wells, 2009, p. 232). My understanding of Diminishing returns to Physical Capital is described as how the marginal production of a factor of production starts to progressively decrease as the factor is increased, in contrast to the increase that would otherwise be normally expected. Example of increased, in contrast to the increase that would otherwise be normally expected....
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This note was uploaded on 01/28/2011 for the course BU 204 taught by Professor Enricodigiammarinojr during the Spring '10 term at Kaplan University.

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BU204_03_Johnson_Jennifer_Unit_5_Homework prof corrections...

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