Question

Holding the human capital per worker and technology unchanged, the estimated aggregate production function in Jamaica is Y / L = 50 * K / L, where Y = real output, L = number of workers, and K = quantity of physical capital. If real GDP per worker equals $3,200, physical capital per worker equals:

Answer 1

Answer:

64.

Explanation:

We identify in the original equation what data we have and what we lack:

$\frac{Y}{L} =50*\frac{K}{L}$

The problem statement gives us Y / L, which is the real GDP per worker = 3200, so we would lack K / L, which is the physical capital per worker, precisely, the data requested by the exercise. Therefore:

$3200=50*\frac{K}{L}$

To find K / L we make a simple clearance:

$\frac{K}{L} =\frac{3200}{50}$

$\frac{K}{L} =64$

The physical capital equals 64.