2. Cross country comparisons of labor productivity. Show all work, LABEL carefully and NOTE UNITS. Labor Real GDP Real Capital Stock, K (in millions of US Dollars) Country (2019) Total Capital- Labor MPK productivity per hour Function (to 3 decimals) labor Ratio, y hours, L (millions of hours) 33,217.0 Ratio, k Argentina В. 3,399,148.5 А. C. y = 3.66k0.45 y% = 4.26k045 Spain В. 11,733,525.0 30,649.9 А. C. Suppose that Argentina and Spain have the labor productivity functions, real capital stock, and total labor hours given in the table above. A. Calculate the capital-labor ratio, k (round to 2 decimals). Argentina: Spain: B. Calculate real GDP per hour, y (round to 2 decimals). Argentina: Spain: c. Calculate the marginal product of capital, MPK (round to 3 decimals). Argentina: Spain: D. Graph the labor productivity functions for each country on the graph below. Include all relevant information from A-C above, and label your graph carefully (need not be to scale). E. If the MPK for Argentina converges to the MPK for Spain, calculate the new level of k in Argentina. Explain whether labor productivity and the capital-labor ratio will also converge.
2. Cross country comparisons of labor productivity. Show all work, LABEL carefully and NOTE UNITS. Labor Real GDP Real Capital Stock, K (in millions of US Dollars) Country (2019) Total Capital- Labor MPK productivity per hour Function (to 3 decimals) labor Ratio, y hours, L (millions of hours) 33,217.0 Ratio, k Argentina В. 3,399,148.5 А. C. y = 3.66k0.45 y% = 4.26k045 Spain В. 11,733,525.0 30,649.9 А. C. Suppose that Argentina and Spain have the labor productivity functions, real capital stock, and total labor hours given in the table above. A. Calculate the capital-labor ratio, k (round to 2 decimals). Argentina: Spain: B. Calculate real GDP per hour, y (round to 2 decimals). Argentina: Spain: c. Calculate the marginal product of capital, MPK (round to 3 decimals). Argentina: Spain: D. Graph the labor productivity functions for each country on the graph below. Include all relevant information from A-C above, and label your graph carefully (need not be to scale). E. If the MPK for Argentina converges to the MPK for Spain, calculate the new level of k in Argentina. Explain whether labor productivity and the capital-labor ratio will also converge.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter19: The Macroeconomic Perspective
Section: Chapter Questions
Problem 25CTQ: Cross country comparisons of GDP per capita typically use purchasing power parity equivalent...
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