Examples of physical capital in the following topics:
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- The aggregate production function examines how the productivity depends on the quantities of physical capital per worker and human capital per worker.
- The aggregate production function examines how productivity, or real GDP per worker, depends on the quantities of physical capital per worker and human capital per worker.
- The production function relates the physical outputs of production to the physical inputs or factors of production.
- The average physical product is at its maximum.
- Stage 2: output increases at a decreasing rate and the average and marginal physical product are declining.
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- In economics and long-run growth, worker productivity is influenced directly by fixed capital, human capital, physical capital, and technology.
- In economics and long-run growth, worker productivity is influenced directly by fixed capital.
- Human capital and increased worker productivity are critical because they are different from the tangible monetary capital or revenue.
- Human capital grows cumulatively over a long period of time.
- Examine the role of human capital in production and economic growth
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- In economics, capital (also referred to as capital goods, real capital, or capital assets) references non-financial assets used in the production of goods and services.
- It is possible for capital goods to be maintained or regenerated depending on the type of capital.
- Physical Capital: capital that must be produced by human labor before it can become a factor of production (also referred to as manufactured capital).
- Interest allows capital to be obtained, while profit is the accumulation of the capital.
- Social Capital is capital that is captured as goodwill or brand value.
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- During the short-run, there is one fixed factor of production, usually capital.
- Examples of events that cause the curve to shift to the right in the short-run include a decrease in the wage rate, an increase in physical capital stock, and technological progress.
- In the long-run only capital, labor, and technology affect the aggregate supply curve because at this point everything in the economy is assumed to be used optimally.
- Examples of events that shift the long-run curve to the right include an increase in population, an increase in physical capital stock, and technological progress.
- When there are changes in the quality and quantity of labor and capital the changes affect both the short-run and long-run supply curves.
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- A capital market is a financial exchange for the buying and selling of long-term debt and equity-backed securities.
- A key division within the capital markets is between the primary markets and secondary markets.
- Money markets and capital markets are closely related, but are different types of financial markets.
- When a company borrows from the primary capital markets, often the purpose is to invest in additional physical capital goods, which will be used to help increase its income.
- The NYSE is one of the largest capital markets in the world.
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- Labour can be physical or mental.
- Yet, a reforested area may be more like capital.
- Production can occur if inputs are physically altered to increase their ability to satisfy wants (utility).
- The iron has been physically altered to increase its ability to satisfy wants.
- Physical production is the most obvious and easiest to measure.
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- In economics, a production function relates physical output of a production process to physical inputs or factors of production.
- It is a mathematical function that relates the maximum amount of output that can be obtained from a given number of inputs - generally capital and labor.
- This production function says that a firm can produce one unit of output for every unit of capital or labor it employs.
- For example, the firm could produce 25 units of output by using 25 units of capital and 25 of labor, or it could produce the same 25 units of output with 125 units of labor and only one unit of capital.
- For example, a firm with five employees will produce five units of output as long as it has at least five units of capital.
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- In economics, investment is defined as the accumulation of newly produced physical entities such as factories, machinery, houses, and inventories of goods.
- Firms can buy non-residential capital (buildings, equipment, etc. ) while individual consumers can buy residential capital (houses).
- Economic investment, also referred to as capital investment, is different from and should not be confused with financial investment.
- Non-residential fixed investment: The amount purchased per unit time of goods which are not consumed, but are used for future production (capital).
- An example of non-residential fixed investment is investment in human capital, which includes additional schooling or training.
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- Firms add capital to the point where the value of marginal product of capital is equal to the rental rate of capital.
- Capital is a factor of production, along with labor and land.
- It can be used to derive the marginal product for capital, which is the increase in the amount of output from an additional unit of capital.
- The value of marginal product (VMP) of capital is the marginal product of capital multiplied by price.
- Firms will increase the quantity of capital hired to the point where the value of marginal product of capital is equal to the rental rate of capital.
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- The cost of capital is the rate companies must pay to finance a project.
- The cost of capital refers to the cost of the money used to pay for the capital.
- The cost of capital is used to evaluate a company's new projects.
- In order for an investment to be worthwhile, the expected return on capital has to be higher than the cost of capital.
- One way of combining the cost of debt and equity to generate a single cost of capital number is through the weighted-average cost of capital (WACC).