2 Consider the following data on two fictional countries: 1 and 2. .Country 1Country 2Output per worker (y)Physical Capital per Worker, kHuman Capital per Worker, h1208075502575If the production function is y = Ak°h1-a, where a = 0.5., then if all differences in outputwere due to differences in factor accumulation then country 1 output would betimes greater than in Country 21.700.711.000.59

Given; Production Function; y=Akαh1-α where; α=0.5 Country 1 Country 2 Output per worker 120…

Consider the following data on two fictional countries: 1 and 2. . Country 1 Country 2 Output per worker (y) Physical Capital per Worker, k Human Capital per Worker, h 120 80 75 50 25 75 If the production function is y = Akªh1-a, where a = 0.5., then if all differences in output were due to differences in factor accumulation then country 1 output would be times greater than in Country 2 1.70 0.71 1.00 0.59 O O O

Consider the following data on two fictional countries: 1 and 2. . Country 1 Country 2 Output per worker (y) Physical Capital per Worker, k Human Capital per Worker, h 120 80 75 50 25 75 If the production function is y = Akªh1-a, where a = 0.5., then if all differences in output were due to differences in factor accumulation then country 1 output would be times greater than in Country 2 1.70 0.71 1.00 0.59 O O O

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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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…
This is a really straightforward problem of human capital acquisition. Let ht stand for generation t's human capital (i.e., human capital of people born in year t). Assume that education spending, represented by x and quantified in $1,000 US dollars, builds human capital. If x = 30, the entire expenditure is 30,000 dollars, and the individual's human capital is ht = 2x.Assume that everyone has the same amount of human capital and that production per person is the same.Individual is yt = Aht, where A > 0 is a constant technological parameter.Find yt's (long-term) growth rate. Display all of your work and explain how you arrived at your conclusions.
Country Has Cobb-Douglas production function: Y(it) = A(it) x K(it)1/3L(it)2/3 Where: Y(it) = realGDP K(it) = Capital L(it) = No. workers employed in country (i) on date (t) Suppose multiple countries share the same alpha = 1/3 but different levels of totalfactorproductivity (A(it)). Now Instead of the above function the production function changes to: Y(it) = A(it) x K(it)1/3 x (H(it)L(it))2/3 Y(it) = realGDP K(it) = Capital H(it) = Average hours worked p/worker (This is so the labour input is total hours opposed to employment) L(it) = No. workers employed in country (i) on date (t) These multiple countries share the same alpha = 1/3 but different levels of totalfactorproductivity (A(it)). How does this new variable in the formula impact TFP growth? What happens if the country has higher average hours per worker? what happens if the country has lower average hours per worker?
1. Country A and B both have the production functionY = F (K, L) = K ½L ½or Y = K0.5 L0.5 a) What is the per-worker production function, y= f (k)? Please make sure to write specificfunctional form of the per-worker production function. b) Assume that neither country experiences population growth nor technological progressand that 4 percent of capital depreciates each year. Assume further that country A saves 24percent of output each year and country B saves 16 percent of output each year. Using youranswer from part a) and the steady-state condition, find the steady-state level of capital perworker for each country. Then find the steady-state levels of income per worker for eachcountry and steady-state level of consumption per worker for each country.
Country Has Cobb-Douglas production function: Y(it) = A(it) x K(it)1/3L(it)2/3 Where: Y(it) = realGDP K(it) = Capital L(it) = No. workers employed in country (i) on date (t) Suppose multiple countries share the same alpha = 1/3 but different levels of totalfactorproductivity (A(it)). How would one calculate the average annual growth rate of totalfactorprodctivity of each country
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Assume that a country's production function is Y = K1/2L1/2 and there is no population growthor technological change.a. What is the per-worker production function y = f (k)?b. Assume that the country possesses 40,000 units of capital and 10,000 units of labor. What isY? What is labor productivity computed from the per-worker production function? Is thisvalue the same as labor productivity computed from the original production function?c. Assume that 10 percent of capital depreciates each year. What gross saving rate isnecessary to make the given capital–labor ratio the steady-state capital–labor ratio? (Hint:In a steady state with no population growth or technological change, the saving ratemultiplied by per-worker output must equal the depreciation rate multiplied by the capital–labor ratio.)d. If the saving rate equals the steady-state level, what is consumption per worker?
Some resource-rich countries have succeeded in converting resource wealth into longterm and equitable economic development, while many others have not. Naturalresources have played a fundamental role in the growth of several industrializedeconomies, including Germany and the United Kingdom, where coal and iron ore depositswere a precondition for the Industrial Revolution. The United States was the world’sleading mineral economy from the mid-nineteenth to the mid-twentieth century and in thesame period became the world’s leader in manufacturing (van der Ploeg 2011). Morerecently, countries such as Botswana, Chile, and Norway have used abundant oil andmineral resources as the foundation for economic growth. However, in many othercountries, resource extraction appears to have undermined governance, fed corruptionand capital flight, and increased inequality.Required:(a) Discuss the main challenges posed by resource revenues; and(b) Discuss the special fiscal institutions and mechanisms…
Consider the following (made-up) statistics for some econ-omies. Assume the exponent on capital is 1/3 and that the labor composition is unchanged. For each economy, compute the growth rate of TFP.(a) A European economy: gY/L = 0.03, gK/L = 0.03.(b) A Latin American economy: gY/L = 0.02, gK/L = 0.01.(c) An Asian economy: gY/L = 0.06, gK/L = 0.15.
Consider the economies of Hermes and Gribinez, both of which produce gaggles of gop using only tools and workers. Suppose that, during the course of 10 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 2016 and 2026. **THE TABLE IS ATTACHED** Initially, the number of tools per worker was higher in Hermes than in Gribinez. From 2016 to 2026, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Hermes to rise by a _________ (LARGER/SMALLER) amount than productivity in Gribinez. This illustrates the _______ (CATCH-UP/NATURAL RESOURCES/TECHNOLOGY/HUMAN CAPITAL) effect. THANK YOU FOR THE HELP
Suppose that two countries are exactly alike in every respect except that capital depreciates at afaster rate in Country A than in Country B due to harsh climate conditions. In which country willthe Golden Rule level of capital per worker be higher? Illustrate graphically.
Assume that Economyland’s production function is Y = F (K, L) = K 0.5 L 0.5Where Y is output level, K is the amount of capital input, and L is the amount of laborinput. a) What is the per-worker production function, y= f (k) for Economyland? b) Assume that 10 percent of capital depreciates each year and savings rate is 20 percent,find the steady-state level of capital per worker for Economyland. Then find the steady-state levelof income per worker and steady-state level of consumption per worker. c) Is it possible to save too much? Why?