For three years, there was no technological change in Longland but capital per hour of labour increased from $10 to $20 to $30 and real GDP per hour of labour increased from $3.80 to $5.70 to $7.13. Then in the fourth year, capitalper hour of labour remained constant but real GDP per hour of labour increased to $10. Longland, experience diminishing retums because,OA. does not in the fourth year capital per hour of labour does not changeOB. does; as capital per hour of labour increases, real GDP per hour of labour increases but by smaller amountsOC. does not; as capital per hour of labour increases, real GDP per hour of labour also increasesOD. does; in the fourth year capital per hour of labour does not changeOE. does; all countries experience diminishing returns

This issue is related to the economic idea of "diminishing returns" and is widely explored in…

three years, there was no technological change in Longkand but capital pe hour of labour remained constant but real GDP per hour of labour increas OA. does not in the fourth year capital per hour of labour does not change OB. does; as capital per hour of labour increases, real GDP per hour of las OC. does not as capital per hour of labour increases, real GDP per hour- OD. does; in the fourth year capital per hour of labour does not change E does, all countries experience diminishing res

three years, there was no technological change in Longkand but capital pe hour of labour remained constant but real GDP per hour of labour increas OA. does not in the fourth year capital per hour of labour does not change OB. does; as capital per hour of labour increases, real GDP per hour of las OC. does not as capital per hour of labour increases, real GDP per hour- OD. does; in the fourth year capital per hour of labour does not change E does, all countries experience diminishing res

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 34P: Say that the average worker in Canada has a productivity level of 30 per hour while the average...

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Say that the average worker in Canada has a productivity level of 30 per hour while the average worker in the United Kingdom has a productivity level of 25 per hour (both measured in U.S. dollars). Over the next five years, say that worker productivity in Canada grows at 1 per year while worker productivity in the UK grows 3 per year. After five years, whiz) will have the higher productivity level, and by how much?
Say that the average worker in the U.S. economy is eight times as productive as an average worker in Mexico. If the productivity of U.S. workers grows at 2 for 25 years and the productivity of Mexicos workers grows at 6 for 25 years, which country will have higher worker productivity at that point?
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.
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?
A small economy increased its capital per hour worked (K/L) from $40,000 to $50,000. As a result, real GDP per worker (Y/L) grew from $20,000 to $25,000. If the economy increases its capital per hour worked by another $10,000 to $60,000, but there is no change in technology, by how much more and in what direction will output per worker change? Answer neatly with proper explanation of it
Suppose we have the following production function with human capital normalized to 1 (i.e. human capital = 1), total factor productivity represented with A=10, physical capital represented with K=537, and labor represented with L=754 to create GDP represented with Y. What would the size of this economy be for the common production function of Y=A*K0.5*L0.5? This reads as "A times K to the 0.5 power times L to the 0.5 power." However, this is also the same as "A times the square root of K times the square root of L." Round your answer to two digits after the decimal.
Please no written by hand and graph Consider a small world that consists of two different countries, a developed and a developing country. In both countries, assume that the production function takes the following form: Y = F (K, LE) = K¹/4 (LE) 3/4, where Y is output, K is capital stock, L is total employment and E is labour augmenting technology. (a) Does this production function exhibit constant returns to scale in K and L? Explain. (b) Express the above production function in its intensive form (i.e., output per-effective worker y as a function of capital per effective worker k). (c) Solve for the steady-state value of y as a function of saving rate s, population growth rate n, technological progress g, and capital depreciation rate 6. (d) The developed country has a savings rate of 30% and a population growth rate of 2% per year. Meanwhile, the developing country has a savings rate of 15% and population growth rate of 5% a year. Technology evolves at the rate of 8% and 2% in…
Productivity is generally measured as: O output per year. O nominal output over time. O real output over time. O output per worker. A
In the production function, Total factor productivity = A = 3.5% Labor input = L = 0.75 Capital input = K = 1 – 0.75 = 0.25 Therefore, Y = 3.5% - {(0.25 × 2%) + (0.75 × 2%)} = 3.5% - (0.005 + 0.015) = 0.035 – 0.02 = 0.015 = 1.5% Answer: Contribution to growth by total factor productivity is 1.5%. Does this mean that labour contributes 75 per cent of the increased output? Explain.
In Wonderland production per worker (y) depends on capital per worker (3) such the y=10√k. Every year 15% of the capital stock depreciates, while workers in Wonderland save 10% of their income. Every year the population grows at as e of 3% (d) How might Wonderland and Neverland achieve economic growth in the long run?
3.1 Robert Solow added.......................... to the conventional production function to account for technological change.
Suppose the production function is Y = AK0.3N0.7. 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?