Consider the hypothetical economies of Hermes and Svarta, both of which produce bottles of bulg 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 2018 and 2058. Physical Capital Year (Tools per worker) 2018 18 2058 23 Year 2018 2058 Physical Capital (Tools per worker) 15 20 Labor Force (Workers) 60 60 Labor Force (Workers) 60 60 Hermes Output Productivity (Bottles of bulg) (Bottles per worker) 3,600 4,320 Svarta Output Productivity (Bottles of bulg) (Bottles per worker) 1,800 3,240 Initially, the number of tools per worker was higher in Hermes than in Svarta. From 2018 to 2058, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Hermes to rise by a amount than productivity in Svarta. This illustrates the effect.

Consider the hypothetical economies of Hermes and Svarta, both of which produce bottles of bulg 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 2018 and 2058. Physical Capital Year (Tools per worker) 2018 18 2058 23 Year 2018 2058 Physical Capital (Tools per worker) 15 20 Labor Force (Workers) 60 60 Labor Force (Workers) 60 60 Hermes Output Productivity (Bottles of bulg) (Bottles per worker) 3,600 4,320 Svarta Output Productivity (Bottles of bulg) (Bottles per worker) 1,800 3,240 Initially, the number of tools per worker was higher in Hermes than in Svarta. From 2018 to 2058, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Hermes to rise by a amount than productivity in Svarta. This illustrates the effect.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Answer the given question with a proper explanation and step-by-step solution.

Consider the hypothetical economies of Hermes and Svarta, both of which produce bottles of bulg 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 2018 and 2058.
Physical Capital
Year (Tools per worker)
2018
18
2058
23
Year
2018
2058
Physical Capital
(Tools per worker)
15
20
Labor Force
(Workers)
60
60
Labor Force
(Workers)
60
60
Hermes
Output
(Bottles of bulg)
3,600
4,320
Svarta
Output
(Bottles of bulg)
1,800
3,240
Productivity
(Bottles per worker)
Productivity
(Bottles per worker)
Initially, the number of tools per worker was higher in Hermes than in Svarta. From 2018 to 2058, capital per worker rises by 5 units in each country.
The 5-unit change in capital per worker causes productivity in Hermes to rise by a
amount than productivity in Svarta. This illustrates
the
effect.

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