15. Suppese that in 1960 Japan had an initial per capita GDP of $12.000 per year and China had a per capitaGOP of 55.000. But China is grewing at 5 percent per year and iapan is growing at 3 percent per year.ia richer in 2010 with a per capita GDP of eporoni matelya lapan $5.000a. China: $73,500a. lapen: $31,500. Not enough information is given.e China $5,000

Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. here we calculate the given as follow;GIVEN; Country - Japan Per capita GDP in 1960 = $12,000 Growth rate of GDP = 3% or 0.03 Time Period = 50 years Calculate per capita GDP in 2010 - Per capita GDP in 2010 = Per capita GDP in 1960 (1+0.03)50 Per capita GDP in 2010 = $12,000 x (1.03)50 Per capita GDP in 2010 = $12,000 x 4.3839 Per capita GDP in 2010 = $52,606.8 The per capita GDP of Japan in 2010 is $52,606.8 Country - China Per capita GDP in 1960 = $5,000 Growth rate of GDP = 5% or 0.05 Time Period = 50 years Calculate per capita GDP in 2010 - Per capita GDP in 2010 = Per capita GDP in 1960 (1+0.05)50 Per capita GDP in 2010 = $5,000 x (1.05)50 Per capita GDP in 2010 = $5,000 x 11.4674 Per capita GDP in 2010 = $57,337 The per capita GDP of China in 2010 is $57,337 Excess = Per capita GDP of China in 2010 - Per capita GDP of Japan in 2010 Excess = $57,337 - $52,606.8 Excess= $4,730.2 or approximately $5,000. Thus, China is richer in 2010 with a per capita GDP of approximately $5,000. Hence, the correct answer is the option (c)

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5. Suppese that in 1960 Jpan had an initial per capite GDP of $12,000 per year and China had a per capita GOP of 55.00. Dut Chine is grewing at 5 percent per yer and iepan is yrowing ot 3 percent per year. a richer in 2010 with e per capita GDP of aporoni mately. a lapan $5.000 a. lapen S31.500 China, $5,000 a Chinas $78,500 • Not enough information is given.

5. Suppese that in 1960 Jpan had an initial per capite GDP of $12,000 per year and China had a per capita GOP of 55.00. Dut Chine is grewing at 5 percent per yer and iepan is yrowing ot 3 percent per year. a richer in 2010 with e per capita GDP of aporoni mately. a lapan $5.000 a. lapen S31.500 China, $5,000 a Chinas $78,500 • Not enough information is given.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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