Consider the economies of Hermes and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labour force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2013 and 2033. Hermes Physical Capital Labour Force Output Productivity Year (Tools per worker) (Workers) (Gobs of goo) (Gobs per worker) 2013 11 30 3,000 2033 15 30 3,600 Gobbledigook Physical Capital Labour Force Output Productivity Year (Tools per worker) (Workers) (Gobs of goo) (Gobs per worker) 2013 8 30 2,400 2033 12 30 3,600 Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2013 to 2033, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a amount than productivity in Gobbledigook. This illustrates the concept of , which makes it for countries with low output to catch up to those with higher output.
Consider the economies of Hermes and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labour force remains the same. Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2013 and 2033. Hermes Physical Capital Labour Force Output Productivity Year (Tools per worker) (Workers) (Gobs of goo) (Gobs per worker) 2013 11 30 3,000 2033 15 30 3,600 Gobbledigook Physical Capital Labour Force Output Productivity Year (Tools per worker) (Workers) (Gobs of goo) (Gobs per worker) 2013 8 30 2,400 2033 12 30 3,600 Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2013 to 2033, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a amount than productivity in Gobbledigook. This illustrates the concept of , which makes it for countries with low output to catch up to those with higher output.
Chapter1: Making Economics Decisions
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Consider the economies of Hermes and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labour force remains the same.
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Transcribed Image Text:4. The catch-up effect
Consider the economies of Hermes and Gobbledigook, both of which produce gobs of goo using only tools and workers. Suppose that, during the
course of 20 years, the level of physical capital per worker rises by 4 tools per worker in each economy, but the size of each labour force remains the
same.
Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2013 and 2033.
Hermes
Physical Capital
Labour Force
Output
Productivity
Year (Tools per worker)
(Workers)
(Gobs of goo) (Gobs per worker)
2013
11
30
3,000
2033
15
30
3,600
Gobbledigook
Physical Capital
Labour Force
Output
Productivity
Year (Tools per worker)
(Workers)
(Gobs of goo) (Gobs per worker)
2013
8
30
2,400
2033
12
30
3,600
Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2013 to 2033, capital per worker rises by 4 units in each
country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a
amount than productivity in Gobbledigook.
This illustrates the concept of
, which makes it
for countries with low output to catch up to those
with higher output.
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