Week 1_Unit 1: Capitalist revolution

Question 1

What is GDP?

Answer 1

Gross Domestic Product=

Measures value of goods and services produced in an economy=

measure of total income and output of the economy in a given period

Question 2

What is GDP per capita?

Answer 2

=GDP per person=

measure of living standards through average income (but does not equal to disposable income)

Question 3

What factors result in sudden economic growth?

Answer 3

technological advancement and the role of capitalism

Question 4

What is hockey stick growth?

Answer 4

represent the sustained rapid growth in GDP per capita experienced by countries worldwide

Question 5

What is technology?

Answer 5

a process that uses inputs to produce an output

Question 6

What were the results of the technological revolution?

Answer 6

• Resulted in increased living standards by reducing amount of work time needed to produce things
• Technological revolution is driven by scarcity (limited amount) of time
• Increased technology= more leisure time and less work time

Technology also increases speed at which information travels which results in a more connected world

Question 7

Environmental consequences of hockey stick growth?

Answer 7

• Increased population and production affects the environment
• These effects are the results of expansion of economy and organisation of economy

Question 8

What is capitalism?

Answer 8

an economic system where the main institutions are private properties, markets and firms

Question 9

what are firms?

Answer 9

business organisation that uses inputs and outputs, and sets prices to atleast cover production costs

• Inputs and outputs are private property
• Firms use markets to sell outputs
• Aim is to make profit

Question 10

Private Property?

Answer 10

ownership rights over possessions

Question 11

What are markets?

Answer 11

a way for people to exchange products and services for their mutual benefit

• Markets are reciprocated transfers, voluntary and usually there is competition

Question 12

What are institutions?

Answer 12

• Institutions= laws and social customs governing the production and distribution of goods and services

Question 13

How does capitalism result in growth of living standards?

Answer 13

• Impact on tech= firms competing in markets had strong incentives to adopt and develop new technologies
• Specialisation= growth of firms and expansion of markets allowed specialisation in tasks and production
• TOGETHER WITH THE TECHNOLOGICAL REVOLUTION THIS INCREASED WORKER PRODUCTIVITY