Monday
Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 9 The Real Economy in the Long Run Chapter 25 of 36 Production and Growth Section 6 of 23 … How is productivity determined? For Robinson Crusoe, fishing productivity factors include: -1- his amount and quality of fishing poles -2- any previous training in or experience with fishing techniques -3 - the size of the island’s fish supply -4- his ability to develop better fishing tools Each of these four are productivity determinants, and have counterparts in large economies. These determinants are called: -1- physical capital -2- human capital -3 - natural resources -4- technological advancement … -1- Physical Capital Workers are more productive if they have greater quantity and quality tools. The stock of equipment and structures used for production is called physical capital, or simply capital. For carpenters, the capital they use includes saws, lathes, and drill presses. More and better tools allow car...