3. Productivity and growth policies Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Physical Capital Labor Force (Looms) Physical Capital per Worker Labor Hours Output Labor Productivity Year (Workers) (Looms) (Hours) (Garments) (Garments per hour of labor) 2016 120 60 3,000 21,000 2017 400 100 3,500 49,000 Based on your calculations, in physical capital per worker from 2016 to 2017 is associated with in labor productivity from 2016 to 2017. Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. O Offering free public education to every worker in the country O subsidizing research and development into new weaving technologies O Imposing a tax on looms O Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
3. Productivity and growth policies Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Physical Capital Labor Force (Looms) Physical Capital per Worker Labor Hours Output Labor Productivity Year (Workers) (Looms) (Hours) (Garments) (Garments per hour of labor) 2016 120 60 3,000 21,000 2017 400 100 3,500 49,000 Based on your calculations, in physical capital per worker from 2016 to 2017 is associated with in labor productivity from 2016 to 2017. Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. O Offering free public education to every worker in the country O subsidizing research and development into new weaving technologies O Imposing a tax on looms O Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
Chapter3: Scarcity, Trade-offs, And Production Possibilities
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:3. Productivity and growth policies
Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years.
Complete the table by calculating physical capital per worker as well as labor productivity.
Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as
the quantity of goods per hour of labor.
Physical Capital
Labor Force
Physical Capital per Worker
Labor Hours
Output
Labor Productivity
Year
(Looms)
(Workers)
(Looms)
(Hours)
(Garments)
(Garments per hour of labor)
2016
120
60
3,000
21,000
2017
400
100
3,500
49,000
Based on your calculations,
in physical capital per worker from 2016 to 2017 is associated with
in labor
productivity from 2016 to 2017.
Suppose you're in charge of establishing economic policy for this small island country.
Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply.
O offering free public education to every worker in the country
O Subsidizing research and development into new weaving technologies
O Imposing a tax on looms
O Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
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