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ECO 105 -
factors of production
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ECO 105 1nd Edition Lecture 4Outline of Last Lecture SNOW DAY!Outline of Current Lecture I. The Circular Flow Diagram (CFD)Current LectureI. The Circular Flow Diagram (CFD)a. Factors of production = labor (L) and capital (K)b. Production function: Q = F(L,K)i. Q = quantity produced is a function of labor and capital (amount)c. Wages = W for labor $These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.d.MV = PQM = quantity of moneyV = velocity of moneyP = price levelQ = outputP * Q = nominal GDPi. Assume M goes up, the P or Q also goes up (direct relationship)ii. Interest/rent = (r) $ for
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