4. Output in an economy is given by the production function, Y=A (UKK) 0.30 (UNN) 0.70, where Y is output and A measures productivity. The capital stock K is fixed at 40, and employment N is fixed at 118. The utilization rates of capital and labor equal 1 in both 2012 and 2013. Output equals 111 in 2012 and equals 116.55 in 2013. The values of the Solow residual as measured by the parameter A are found to be 1.3013 in 2012 and 1.3664 in the year 2013. Thus the growth rate of the Solow residual is 5.00%. Now suppose that betweeen 2012 and 2013, utilization of both capital and labor each increase by 2%. Output in 2013 is 116.55, as it was above. Calculate the new measure of A in the year 2013: (Enter your response rounded to four decimal places.) Calculate the growth rate of A from 2012 to 2013: %. (Enter your response as a percentage rounded to two decimal places.) When the capital and labor utilization rates increase, the growth rate of productivity (1) (1) falls short of exceeds equals the growth rate of the measured Solow residual.
4. Output in an economy is given by the production function, Y=A (UKK) 0.30 (UNN) 0.70, where Y is output and A measures productivity. The capital stock K is fixed at 40, and employment N is fixed at 118. The utilization rates of capital and labor equal 1 in both 2012 and 2013. Output equals 111 in 2012 and equals 116.55 in 2013. The values of the Solow residual as measured by the parameter A are found to be 1.3013 in 2012 and 1.3664 in the year 2013. Thus the growth rate of the Solow residual is 5.00%. Now suppose that betweeen 2012 and 2013, utilization of both capital and labor each increase by 2%. Output in 2013 is 116.55, as it was above. Calculate the new measure of A in the year 2013: (Enter your response rounded to four decimal places.) Calculate the growth rate of A from 2012 to 2013: %. (Enter your response as a percentage rounded to two decimal places.) When the capital and labor utilization rates increase, the growth rate of productivity (1) (1) falls short of exceeds equals the growth rate of the measured Solow residual.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 8E
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A5
Transcribed Image Text:4. Output in an economy is given by the production function,
Y=A (UKK) 0.30 (UNN) 0.70,
where Y is output and A measures productivity. The capital stock K is fixed at 40, and employment N is fixed at 118. The utilization rates of capital and labor equal 1 in both 2012 and 2013. Output equals 111 in 2012 and equals 116.55 in 2013.
The values of the Solow residual as measured by the parameter A are found to be 1.3013 in 2012 and 1.3664 in the year 2013. Thus the growth rate of the Solow residual is 5.00%.
Now suppose that betweeen 2012 and 2013, utilization of both capital and labor each increase by 2%. Output in 2013 is 116.55, as it was above.
Calculate the new measure of A in the year 2013:
(Enter your response rounded to four decimal places.)
Calculate the growth rate of A from 2012 to 2013:
%. (Enter your response as a percentage rounded to two decimal places.)
When the capital and labor utilization rates increase, the growth rate of productivity (1)
(1) falls short of
exceeds
equals
the growth rate of the measured Solow residual.
Expert Solution
Step 1
The economic idea of efficiency
- At a public level it catches the economy's capacity to 'bridle its physical and HR to produce output and income.
- Productivity development alludes to an expansion in the worth of results delivered for a given degree of contributions, over a given timeframe.
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