4. The catch-up effectConsider the hypothetical economies of Hestiatia and Vanaheim, both of which produce crates of copia using only workers and tools. Suppose that, duringthe course of 35 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labor force remains thesame.Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2024 and 2059.Year20242059Year20242059Physical Capital(Tools per worker)1923Physical Capital(Tools per worker)1620Labor Force(Workers)6060Labor Force(Workers)6060HestiatiaOutput(Crates of copia)6,0007,200VanaheimOutput(Crates of copia)4,8007,200Productivity(Crates per worker)Productivity(Crates per worker)Initially, the number of tools per worker was higher in Hestiatia than in Vanaheim. From 2024 to 2059, capital per worker rises by 4 units in eachcountry. The 4-unit change in capital per worker causes productivity in Hestiatia to rise by aamount than productivity in Vanaheim. Thisillustrates theeffect.

Productivity is an important economic concept that is used to measure a production efficiency of a…

4. The catch-up effect Consider the hypothetical economies of Hestiatia and Vanaheim, both of which produce crates of copia using only workers and tools. Suppose that, during the course of 35 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labor force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2024 and 2059. Physical Capital Year (Tools per worker) 2024 2059 Year 2024 2059 19 23 Physical Capital (Tools per worker) 16 20 Labor Force (Workers) 60 60 Hestiatia Labor Force (Workers) 60 60 Output (Crates of copia) 6,000 7,200 Vanaheim Output (Crates of copia) 4,800 7,200 Productivity (Crates per worker) Productivity (Crates per worker) Initially, the number of tools per worker was higher in Hestiatia than in Vanaheim. From 2024 to 2059, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hestiatia to rise by a amount than productivity in Vanaheim. This illustrates the effect.

4. The catch-up effect Consider the hypothetical economies of Hestiatia and Vanaheim, both of which produce crates of copia using only workers and tools. Suppose that, during the course of 35 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labor force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2024 and 2059. Physical Capital Year (Tools per worker) 2024 2059 Year 2024 2059 19 23 Physical Capital (Tools per worker) 16 20 Labor Force (Workers) 60 60 Hestiatia Labor Force (Workers) 60 60 Output (Crates of copia) 6,000 7,200 Vanaheim Output (Crates of copia) 4,800 7,200 Productivity (Crates per worker) Productivity (Crates per worker) Initially, the number of tools per worker was higher in Hestiatia than in Vanaheim. From 2024 to 2059, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hestiatia to rise by a amount than productivity in Vanaheim. This illustrates the effect.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 4P

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Why dues productivity growth in high-income economies not slow down as it runs into diminishing returns from additional investments in physical capital and human capital? Does this show one area where the theory of diminishing returns fails to apply? Why or why not?
Consider the economies of Sporon and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 5 tools per worker in each economy, but the size of each labor force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2015 and 2035. Sporon Year Physical Capital (Tools per worker) Labor Force (Workers) Output (Gobs of goo) Productivity (Gobs per worker) 2015 11 30 1,800 2035 16 30 2,160 Gobbledigook Year Physical Capital (Tools per worker) Labor Force (Workers) Output (Gobs of goo) Productivity (Gobs per worker) 2015 8 30 900 2035 13 30 1,620 Initially, the number of tools per worker was higher in Sporon than in Gobbledigook. From 2015 to 2035, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker…
Suppose that 10 workers were required in 2010 to produce 40,000 bushels of wheat on a 1,000-acre farm. a. What is the average output per acre? Per worker? b. If in 2020 only 8 workers produce 44,000 bushels of wheat on that same 1,000-acre farm, what will be the average output per acre? Per worker? c. By what percentage does productivity (output per worker) increase over those 10 years? Over those 10 years, what is the average annual percentage increase in productivity?
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The following table shows the GDP per capita of various countries forthe years 1960 and 2010 in PPP-adjusted 2005 dollars. The table alsocontains the implied growth rates, which show how much on average eachcountry needed to grow each year to reach the 2010 level of GDP per capitastarting from the 1960 level of GDP per capita. Use the table to answer thefollowing questions. 1. Why have some countries reduced the gap between their incomes andthat of the United States and other countries failed to do so?
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