onsider a small island country whose only industry is fishing. The following table shows information about the small economy in two different years. Complete the table by calculating physical capital per worker as well as 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. Year Physical Capital Labor Force Physical Capital per Worker Labor Hours Output Labor Productivity (Fishing poles) (Workers) (Fishing poles) (Hours) (Fish) (Fish per hour of labor) 2016 120 60 3,300 23,100 2017 400 100 3,500 49,000 Based on your calculations, in physical capital per worker from 2016 to 2017 is associated with in labor productivity from 2016 to 2017. 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 fishing industry? Check all that apply. Imposing restrictions on foreign ownership of domestic capital Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts Imposing a tax on fishing poles Offering free public education to every worker in the country

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. Productivity and growth policies

Consider a small island country whose only industry is fishing. The following table shows information about the small economy in two different years.

Complete the table by calculating physical capital per worker as well as 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.

Year	Physical Capital	Labor Force	Physical Capital per Worker	Labor Hours	Output
(Fishing poles)	(Workers)	(Fishing poles)	(Hours)	(Fish)	(Fish per hour of labor)
2016	120	60		3,300	23,100
2017	400	100		3,500	49,000

Based on your calculations, in physical capital per worker from 2016 to 2017 is associated with in labor productivity from 2016 to 2017.

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 fishing industry? Check all that apply.

Imposing restrictions on foreign ownership of domestic capital

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

Imposing a tax on fishing poles

Offering free public education to every worker in the country

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Introduction:

Goods are commodities that are usually (but not necessarily) tangible, such as pens, physical books, salt, apples, and caps. Services are activities performed by others, such as doctors, lawn care workers, dentists, barbers, waiters, or online servers, as well as a digital book, digital video game, or digital movie. All economic activity and commerce are supported by the production, distribution, and consumption of products and services. According to economic theory, consumption of goods and services is considered to bring utility (satisfaction) to the consumer or end-user, while firms also consume products and services in the course of generating additional commodities and services.

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