(a.) By what percentage did productivity grow from 2010 to 2020? (b.) If output had risen to 798 instead of 399, and capital and labor doubled, by what percentage would productivity have grown from 2010 to 2020?

(a.) By what percentage did productivity grow from 2010 to 2020? (b.) If output had risen to 798 instead of 399, and capital and labor doubled, by what percentage would productivity have grown from 2010 to 2020?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 7E

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Question

Suppose the production function is Y = AK^0.3N^0.7. Suppose in 2010, K = 1000, N = 100, and Y = 199.5.

In 2020, capital, labor, and output have doubled, so K = 2000, N = 200, and Y = 399.

(a.) By what percentage did productivity grow from 2010 to 2020?

(b.) If output had risen to 798 instead of 399, and capital and labor doubled, by what percentage would productivity have grown from 2010 to 2020?

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