CENGAGE MINDTAP Homework (Ch 25) Back to Assignment Attempts Keep the Highest / 3 Q Search this course 4. The catch-up effect Consider the hypothetical economies of Hestiatia and Svarta, both of which produce crates of copia using only workers and tools. Suppose that, during the course of 40 years, the level of physical capital per worker rises by 5 tools per worker in each economy, but the size of each labor force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2021 and 2061. Hestiatia Year 2021 Physical Capital (Tools per worker) 16 Labor Force Output Productivity (Workers) (Crates of copia) (Crates per worker) 60 2061 21 60 3,600 4,320 Svarta Year 2021 Physical Capital (Tools per worker) 13 Labor Force Output Productivity (Workers) 60 2061 18 60 (Crates of copia) (Crates per worker) 1,800 3,240 Initially, the number of tools per worker was higher in Hestiatia than in Svarta. From 2021 to 2061, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Hestiatia to rise by a amount than productivity in Svarta. This illustrates the effect. Grade It Now Save & Continue Continue without saving

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

See similar textbooks

Related questions

Question

Consider the hypothetical economies of Hestiatia and Svarta, both of which produce crates of copia using only workers and tools. Suppose that, during the course of 40 years, the level of physical capital per worker rises by 5 tools per worker in each economy, but the size of each labor force remains the same.

Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2021 and 2061.

Year	Hestiatia
Physical Capital	Labor Force	Output	Productivity
(Tools per worker)	(Workers)	(Crates of copia)	(Crates per worker)
2021	16	60	3,600
2061	21	60	4,320

Year	Svarta
Physical Capital	Labor Force	Output	Productivity
(Tools per worker)	(Workers)	(Crates of copia)	(Crates per worker)
2021	13	60	1,800
2061	18	60	3,240

Initially, the number of tools per worker was higher in Hestiatia than in Svarta. From 2021 to 2061, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Hestiatia to rise by a amount than productivity in Svarta. This illustrates the effect.