The following data give real GDP, Y, capital, K, and labor, N, for the U.S. economy in variousyears. Units and sources are the same as in Table 3.1. Assume that the production functionis Y-AK0.3N0.7Year197019801990K5600805510,9462000 13,131 14,711 1372010 15,599 17,682 139●Y495167599365L7999119(a) Calculate total factor productivity (A). By what percentage did U.S. TFP grow:between 1970 and 1980?between 1980 and 1990?between 1990 and 2000?between 2000 and 2010?(b) Plot the short-run production function while keeping capital fixed at the 1970 level.(c) What happened to the marginal product of labor between 1970 and 2010?HINT: Calculate the marginal product numerically as the extra output gained by adding 1million workers in each of the two years. (The data for employment, N, are measured inmillions of workers, so an increase of 1 million workers is an increase of 1.0.)

The following data give real GDP, Y, capital, K, and labor, N, for the U.S. economy in various years. Units and sources are the same as in Table 3.1. Assume that the production function is Y-AK0.3N0.7 Year Y K 1970 4951 5600 1980 6759 8055 1990 9365 10,946 2000 13,131 14,711 2010 15,599 17,682 ● L 79 99 119 137 139 (a) Calculate total factor productivity (A). By what percentage did U.S. TFP grow: between 1970 and 1980?

The following data give real GDP, Y, capital, K, and labor, N, for the U.S. economy in various years. Units and sources are the same as in Table 3.1. Assume that the production function is Y-AK0.3N0.7 Year Y K 1970 4951 5600 1980 6759 8055 1990 9365 10,946 2000 13,131 14,711 2010 15,599 17,682 ● L 79 99 119 137 139 (a) Calculate total factor productivity (A). By what percentage did U.S. TFP grow: between 1970 and 1980?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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