ESSENTIALS OF ECONOMICS WITH CONNECT
11th Edition
ISBN: 9781266628146
Author: SCHILLER
Publisher: MCG
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Question
Chapter 2, Problem 5P
To determine
(a)
Percentage change in output when workforce grows by 1% and productivity does not change.
To determine
(b)
Percentage changes in output when the workforce grows by 1% and productivity rises by 3%.
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0.5 0.5
Given a production function: Y = AK N If output grows at 5%, capital grows at 2% and the number of
workers grows at 4%, then technology (or total factor productivity) grows at % ? (Answer in integer only,
no decimal place.) Your Answer: Answer
Given a production function: Y = AK0.5 N0.5. If output grows at 5%,
capital grows at 2% and the number of workers grows at 4%, then technology (or
total factor productivity) grows at %?
(Answer in integer only, no decimal place.)
Your Answer:
Answer
Suppose you are given data on the rate of growth of GDP, capital, and labour, and the share of these two factors in GDP. How would you calculate the contribution of Total Factor Productivity to growth? Explain it verbally and formally.
The determinants of productivity
Consider a simple economy whose only industry is fishing. In this industry, productivity—the amount of goods and services a worker can produce per hour—is measured by the number of fish one fisherman catches per hour.
In the following table, match each example to the productivity determinant it represents.
Examples
Human Capital per Worker
Natural Resources per Worker
Physical Capital per Worker
Technological Knowledge
The fertile waters in which the fish feed and breed
An advanced mapping system that determines the likelihood of finding fish schools in different depths and locations
The skills workers develop through training before working on and piloting boats
The boats in the fishing fleet
Chapter 2 Solutions
ESSENTIALS OF ECONOMICS WITH CONNECT
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