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ECON 214 HW12 Production and Growth Assignment solutions complete answers
ECON 214 HW12 Production and Growth Assignment solutions complete answers
1. Economic growth around the world
The following table shows levels of real income per person in several economies during the years 1960 and 2010. The table further shows the average annual growth rate for each economy over this time period. For instance, real income per person in Niger was $945 in 1960, and it actually declined to $570 by 2010. Niger's average annual growth rate during this period was -1.01%, and it featured the lowest level of real income per person of any economy listed in the table in the year 2010.
The levels of real income per person are reported in U.S. dollars using a base year of 2005. The following exercises will provide insight into the different growth experiences of these nations.
Economy
Real Income per Person in 1960
Real Income per Person in 2010
Annual Growth Rate
(Dollars)
(Dollars)
(Percent)
Canada
12,946
35,810
2.06
United Kingdom
11,884
32,034
2.00
Korea
1,610
28,702
5.93
Hong Kong
4,518
44,070
4.66
Guatemala
1,985
3,859
1.34
Niger
945
570
-1.01
Indicate which economy satisfies each of the following statements.
Statement
Canada
Guatemala
Hong Kong
Korea
Niger
United Kingdom
This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.
This economy had the highest level of real income per person in the year 2010.
Consider the following four nations listed below. Which economy started 1960 with a level of real income per person of well below that of the United Kingdom and grew fast enough to catch up with and surpass the United Kingdom's real income per person by 2010?
The following table shows levels of real income per person in several economies during the years 1960 and 2010. The table further shows the average annual growth rate for each economy over this time period. For instance, real income per person in the Central African Republic was $1,010 in 1960, and it actually declined to $628 by 2010. The Central African Republic's average annual growth rate during this period was -0.95%, and it featured the lowest level of real income per person of any economy listed in the table in the year 2010.
The levels of real income per person are reported in U.S. dollars using a base year of 2005. The following exercises will provide insight into the different growth experiences of these nations.
Economy
Real Income per Person in 1960
Real Income per Person in 2010
Annual Growth Rate
(Dollars)
(Dollars)
(Percent)
Australia
13,817
37,338
2.01
Finland
8,837
31,601
2.58
Thailand
772
8,467
4.91
Ireland
7,807
41,558
3.40
Pakistan
717
2,477
2.51
Central African Republic
1,010
628
-0.95
Indicate which economy satisfies each of the following statements.
Statement
Australia
Central African Republic
Finland
Ireland
Pakistan
Thailand
This economy had the highest level of real income per person in the year 2010.
This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.
Consider the following four nations listed below. Which economy started 1960 with a level of real income per person of below that of Finland and grew fast enough to catch up with and surpass Finland's real income per person by 2010?
Australia
Central African Republic
Ireland
Thailand
The following table shows levels of real income per person in several economies during the years 1960 and 2010. The table further shows the average annual growth rate for each economy over this time period. For instance, real income per person in Zambia was $1,412 in 1960, and it actually declined to $1,309 by 2010. Zambia's average annual growth rate during this period was -0.15%, and it featured the lowest level of real income per person of any economy listed in the table in the year 2010.
The levels of real income per person are reported in U.S. dollars using a base year of 2005. The following exercises will provide insight into the different growth experiences of these nations.
Economy
Real Income per Person in 1960
Real Income per Person in 2010
Annual Growth Rate
(Dollars)
(Dollars)
(Percent)
Austria
9,773
35,031
2.59
Venezuela
7,307
9,762
0.58
Botswana
468
9,515
6.21
Malaysia
1,624
11,863
4.06
Honduras
1,932
3,146
0.98
Zambia
1,412
1,309
-0.15
Indicate which economy satisfies each of the following statements.
Statement
Austria
Botswana
Honduras
Malaysia
Venezuela
Zambia
This economy experienced the fastest rate of growth in real income per person from 1960 to 2010.
This economy had the highest level of real income per person in the year 2010.
Consider the following four nations listed below. Which economy started 1960 with a level of real income per person of well below that of Venezuela and grew fast enough to catch up with and surpass Venezuela's real income per person by 2010?
Austria
Botswana
Malaysia
Zambia
2. The determinants of productivity
Suppose there is a simple hypothetical economy in which the only industry is cloud computing. In the cloud computing field, productivity—the amount of goods and services a worker can produce per hour—is measured by the number of lines of code one programmer authors per hour.
In the following table, select the appropriate productivity determinant that represents each example.
Examples
Human Capital per Worker
Natural Resources per Worker
Physical Capital per Worker
Technological Knowledge
The additional education workers receive from new computer science course offerings
A new data security process that makes the industry’s network more secure
The rare earth metals that serve as inputs to production of computers
The server hardware on which data is stored
Suppose there is a simple hypothetical economy in which the only industry is cloud computing. In the cloud computing field, productivity—the amount of goods and services a worker can produce per hour—is measured by the number of lines of code one programmer authors per hour.
In the following table, select the appropriate productivity determinant that represents each example.
Examples
Human Capital per Worker
Natural Resources per Worker
Physical Capital per Worker
Technological Knowledge
The rare earth metals that serve as inputs to production of computers
The additional education workers receive from new computer science course offerings
The server hardware on which data is stored
An autocomplete plug-in that allows programmers to write code more rapidly
In the following table, select the appropriate productivity determinant that represents each example.
Examples
Human Capital per Worker
Natural Resources per Worker
Physical Capital per Worker
Technological Knowledge
An autoscroll screen function that allows editors to read more efficiently
The presses used to print books
The trees used to create pulp contributing to paper production
The knowledge workers receive from advanced writing workshops
In the following table, select the appropriate productivity determinant that represents each example.
Examples
Human Capital per Worker
Natural Resources per Worker
Physical Capital per Worker
Technological Knowledge
The accumulated weaving experience of the workforce
The looms used to weave the textiles
A special technique that workers can use to create stronger textiles
The grasslands supporting the sheep whose wool is used for weaving
3. Productivity and growth policies
Consider a hypothetical small island nation in which the only industry is weaving. The following table displays information about the economy over a two year period.
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
(Looms)
(Workers)
(Looms)
(Hours)
(Tapestries)
(Tapestries per hour of labor)
2032
300
100
4,000
36,000
2033
480
120
4,200
50,400
Based on your calculations, in physical capital per worker from 2032 to 2033 is associated with in labor productivity from 2032 to 2033.
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 weaving industry? Check all that apply.
Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
Offering free public education to every worker in the country
Subsidizing research and development into new weaving technologies
Imposing restrictions on foreign ownership of domestic capital
Consider a hypothetical small island nation in which the only industry is publishing. The following table displays information about the economy over a two year period.
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
(Printing presses)
(Workers)
(Printing presses)
(Hours)
(Books)
(Books per hour of labor)
2032
40
20
1,000
6,000
2033
120
40
1,400
12,600
Based on your calculations, in physical capital per worker from 2032 to 2033 is associated with in labor productivity from 2032 to 2033.
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 publishing 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
Offering free public education to every worker in the country
Subsidizing research and development into new publishing technologies
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
(Servers)
(Workers)
(Servers)
(Hours)
(TB of data storage)
(TB of data storage per hour of labor)
2039
400
100
5,500
27,500
2040
280
140
9,100
22,750
Based on your calculations, in physical capital per worker from 2039 to 2040 is associated with in labor productivity from 2039 to 2040.
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 cloud computing industry? Check all that apply.
Imposing restrictions on foreign ownership of domestic capital
Imposing a tax on servers
Subsidizing research and development into new cloud computing technologies
Offering free public education to every worker in the country
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
(Looms)
(Workers)
(Looms)
(Hours)
(Tapestries)
(Tapestries per hour of labor)
2040
120
60
3,000
24,000
2041
300
100
3,500
42,000
Based on your calculations, in physical capital per worker from 2040 to 2041 is associated with in labor productivity from 2040 to 2041.
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 weaving industry? Check all that apply.
Subsidizing research and development into new weaving technologies
Imposing a tax on looms
Offering free public education to every worker in the country
Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
4. The catch-up effect
Consider the hypothetical economies of Thalassa and Pelheim, both of which produce bottles of bulg using only workers and tools. Suppose that, during the course of 30 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 2048.
Year
Thalassa
Physical Capital
Labor Force
Output
Productivity
(Tools per worker)
(Workers)
(Bottles of bulg)
(Bottles per worker)
2018
20
60
3,600
2048
25
60
4,320
Year
Pelheim
Physical Capital
Labor Force
Output
Productivity
(Tools per worker)
(Workers)
(Bottles of bulg)
(Bottles per worker)
2018
17
60
1,800
2048
22
60
3,240
Initially, the number of tools per worker was higher in Thalassa than in Pelheim. From 2018 to 2048, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Thalassa to rise by a amount than productivity in Pelheim. This illustrates the effect.
Consider the hypothetical economies of Hermes and Pelheim, both of which produce cases of argo using only workers and tools. Suppose that, during the course of 50 years, the level of physical capital per worker rises by 4 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 2019 and 2069.
Year
Hermes
Physical Capital
Labor Force
Output
Productivity
(Tools per worker)
(Workers)
(Cases of argo)
(Cases per worker)
2019
13
60
6,000
2069
17
60
7,200
Year
Pelheim
Physical Capital
Labor Force
Output
Productivity
(Tools per worker)
(Workers)
(Cases of argo)
(Cases per worker)
2019
10
60
4,800
2069
14
60
7,200
Initially, the number of tools per worker was higher in Hermes than in Pelheim. From 2019 to 2069, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hermes to rise by a amount than productivity in Pelheim. This illustrates the effect.
Consider the hypothetical economies of Hestiatia and Svarta, both of which produce crates of copia using only workers and tools. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 3 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 2020 and 2040.
Year
Hestiatia
Physical Capital
Labor Force
Output
Productivity
(Tools per worker)
(Workers)
(Crates of copia)
(Crates per worker)
2020
22
80
4,800
2040
25
80
5,760
Year
Svarta
Physical Capital
Labor Force
Output
Productivity
(Tools per worker)
(Workers)
(Crates of copia)
(Crates per worker)
2020
25
80
6,400
2040
28
80
6,880
Initially, the number of tools per worker was lower in Hestiatia than in Svarta. From 2020 to 2040, capital per worker rises by 3 units in each country. The 3-unit change in capital per worker causes productivity in Hestiatia to rise by a amount than productivity in Svarta. This illustrates the effect.
Consider the hypothetical economies of Thalassa and Vanaheim, both of which produce bottles of bulg using only workers and tools. Suppose that, during the course of 25 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 2024 and 2049.
Year
Thalassa
Physical Capital
Labor Force
Output
Productivity
(Tools per worker)
(Workers)
(Bottles of bulg)
(Bottles per worker)
2024
20
70
3,500
2049
25
70
4,200
Year
Vanaheim
Physical Capital
Labor Force
Output
Productivity
(Tools per worker)
(Workers)
(Bottles of bulg)
(Bottles per worker)
2024
17
70
1,400
2049
22
70
2,800
Initially, the number of tools per worker was higher in Thalassa than in Vanaheim. From 2024 to 2049, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Thalassa to rise by a amount than productivity in Vanaheim. This illustrates the effect.
5. Economic growth and public policy
Suppose Hondamaha, a motorcycle manufacturing firm headquartered in Japan, builds a production plant in Arizona.
This is an example of foreign investment in the United States.
Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply.
Providing tax breaks and patents for firms that pursue research and development in health and sciences
Increasing taxes on income from savings
Protecting property rights and enforcing contracts
Imposing restrictions on foreign ownership of domestic capital
In less developed countries, what does the term brain drain refer to?
Suppose an American buys stock issued by an Argentinian corporation. The Argentinian firm uses the proceeds from the sale to build a new office complex.
This is an example of foreign investment in Argentina.
Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply.
Pursuing inward-oriented policies
Protecting property rights and enforcing contracts
Providing tax breaks and patents for firms that pursue research and development in health and sciences
Increasing taxes on income from savings
Which of the following are possible outcomes of rapid population growth?
A reduction in human capital per worker
A reduction in capital per worker
An increase in technological knowledge
All of the above
Suppose Hondamaha, a motorcycle manufacturing firm headquartered in Japan, builds a production plant in Arizona.
This is an example of foreign investment in the United States.
Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply.
Pursuing inward-oriented policies
Imposing restrictions on foreign ownership of domestic capital
Increasing taxes on income from savings
Protecting property rights and enforcing contracts
What is a significant factor in long-run economic growth that Robert Fogel, an economic historian, is best known for suggesting?
Improvements in worker health from better nutrition
Improvements in technology from the incentives created by a better patent system
Inward-oriented policies that protect domestic firms from foreign competition
Improvements in the protection of property and enforcement of contracts through the maturation of the civil and criminal justice systems
Suppose a wealthy French citizen buys $2 million worth of stock issued by an American corporation. The American firm uses the proceeds for a factory expansion.
This is an example of foreign investment in the United States.
Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Check all that apply.
Pursuing inward-oriented policies
Imposing restrictions on foreign ownership of domestic capital
Protecting property rights and enforcing contracts
Providing tax breaks and patents for firms that pursue research and development in health and sciences
In less developed countries, what does the term brain drain refer to?
The emigration of highly skilled workers to rich countries
Rapid population growth that lowers the stock of capital per worker
Rapid population growth that increases the burden on the educational system
Lower productivity due to a malnourished workforce
