Answered: Fill in the blank with the options…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 34P: Say that the average worker in Canada has a productivity level of 30 per hour while the average...

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Consider a small island country whose only industry is printing. The following table presents information about this small economy in two different years.

Fill in the blank with the options given.

Based on your calculations, _________ (options: a decrease, an increase) in physical capital per worker from 2025 to 2026 is associated with ________ (options: an increase, a decrease) in labor productivity from 2025 to 2026.

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 printing industry? Check all that apply.

A. Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts

B. Subsidizing research and development of new printing technologies

C. Imposing a tax on printing presses

D. Imposing restrictions on foreign ownership of domestic capital

Consider a small island country whose only industry is printing. The following table presents information about this small economy in two different
years.
Complete the table by calculating physical capital per worker and 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
(Printing presses)
(Workers)
(Printing presses)
(Hours)
(Books)
(Books per hour of labor)
2025
120
60
3,000
21,000
2026
400
100
3,500
49,000

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