微观经济学 第七章.doc

CHAPTER 7: Production and Growth I. Economic Growth around the World A. Table 1 shows data on real GDP per capita in 1960 and 2007 among different countries. 1. What does the data tell us about the living standards between these countries? 2. Which country has the largest growth rates on average? What is the effect of compounding on the process of economic growth? Apply the rule of 70. 3. Because of different growth rates, the ranking of countries by income per person changes substantially over time. Are poor countries doomed to poverty forever? II. Productivity: Its Role and Determinants A. Why Productivity Is So Important? 1. Definition of productivity: the amount of goods and services produced for each hour of a worker’s time. 2. Review of Principle #8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services.  B. How Productivity Is Determined 1. Physical Capital per Worker Definition of physical capital: the stock of equipment and structures that are used to produce goods and services. 2. Human Capital per Worker Definition of human capital: the knowledge and skills that workers acquire through education, training, and experience. 3. Natural Resources per Worker Definition of natural resources: the inputs into the production of goods and services that are provided by nature, such as land, rivers, and mineral deposits. Are Natural Resources a Limit to Growth? 4. Technological Knowledge Definition of technological knowledge: society’s understanding of the best ways to produce goods and services. C. The Production Function 1. A production function describes the relationship between the quantity of inputs used in production and the quantity of output from production. 2. The production function generally is written like this: Y = A F(L, K, H, N) where Y = output, L = quantity of labour, K = quantity of physical capital, H = quantity of human capital, N = quantity of natural reso