Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 42, Problem 3RQ
To determine
The effect of higher population growth over living standards.
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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?
Using the demand and supply of loanable funds, demonstrate the effect of the following on the interest rate. As a result, what would you expect to be the impact of the change on growth? (LO9-3)
a-Government increases spending.
b-Businesses become more productive.
c-The people as a whole save more.
16)A mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States.
If real GDP per person in Mexico grows at the rate of 4 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?)
Instructions: Enter your answer as a whole number.
Chapter 42 Solutions
Economics (Irwin Economics)
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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?arrow_forwardA mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico's real GDP per person is growing at 7 percent per year, it will take about 10 years ( =70/7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $ 11,000 per person, while it was about $ 44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 5 percent per year, about how long will it take Mexico's real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico's 2005 real GDP per person have to double to reach the United States' 2005 real GDP per person?)arrow_forwardWhat are spillover effects and how do they affect growth? (LO27-4)arrow_forward
- 1. California's GDP per capita is $60,000, while Nevada's GDP per capita is$40,000. If both grow at 2 percent per year, how long will it take for the twostates to have the same GDP per capita?A) 25 yearsB) 35 yearsC) 50 yearsD) They will never have the same GDP per capitaarrow_forwardCountry A and country B both have the production function Y = F(K, L) = K1/3L2/3 Does this production function have constant returns to scale? Explain. Find Solow’s production function, y = f (k)? Assume that neither country experiences population growth or technological progress and that 20 percent of capital depreciates each year. Assume further that country A saves 10 percent of output each year and country B saves 30 percent of output each year. Find the steady-state level of capital per worker for each country, then find the steady-state levels of income per worker and consumption per worker. Suppose that both countries start off with a capital stock per worker of 2. What are the levels of income per worker and consumption per worker? Remembering that the change in the capital stock is investment less depreciation, use a calculator (or, better yet, a computer spreadsheet) to show how the capital stock per worker will evolve over time in both countries. For…arrow_forwardAssume real per capita GDP in West Swimsuit is $8,000 while in South Darlinia it is $2,000. The annual growth rate in West Swimsuit is 2.33%, while in South Darlinia it is 7%. How many years will it take for South Darlinia to catch up to the real per capita GDP of West Swimsuit? What will the income of the two countries be when it is equal? type answer only. Do it correctly. Multiple votes will given accordingly.arrow_forward
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- Question Approximately how long will it take Ethiopia to double its real GDF per person of S100 if its growth rate of real GDP per person is 0.9 63 years 77.7 years 70 years 109 years 100 years If Country A's real GDP grows at a rate of 14 percent per year, how many years will it take for Country A's real GDP to double? 10 7 5 30 14 Labor productivity is defined as total real GDP. real GDP per person. total output multiplied by total hours of labor. real GDP per hour of labor. hours of work per person. An increase in labor productivity increases the standard of living. decreases the standard of living. might be the result of an increase in the quantity of labor. generally occurs when physical capital decreases because firms must then hire more workers. cannot occur without a corresponding increase in employment. Last year, in a nation far to the South, real GDP was $90 million 900.000 workers were employed. This year real GDP is $100 million. 950.000 workers are…arrow_forward14... Consider this statement: “Devoting a larger share of national output to investment would help to restore rapid productivity growth and rising living standards.” Under what conditions is the statement accurate?arrow_forward
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