26 February 2013 Econ 202

Increase output per worker how much each worker can

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Increase output per worker (how much each worker can  produce); workers with a few tools will be able to harvest more  than workers with no tools If we’re able to increase our output per worker we are  also increasing our GDP per capita, our income Output = income 2 empirical observations Wealthy have more capital goods Roads, dams, factories, buildings, etc. are all  capital tools  Investment and economic growth are correlated Periods where nations are investing a lot are also  periods when nations are growing Causation? This appears to be what causes economies to grow “It’s all about the tools” All about the capital Production function Y = F(capital, labor, land) Graph o Horizontal axis = capital o Vertical axis = real GDP Tells us how real GDP relates to capital and capital resources Marginal product: Change in output from a change in an input, everything else  held constant
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