Question

Consider the economies of Blahnik and Gribinez, both of which produce glops of gloop using only tools and workers. Suppose that, during the course of 30 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 2021 and 2051.
Blahnik
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Glops of gloop) (Glops per worker)
2021 11 30 3,000
2051 15 30 3,600
Year Gobbledigook
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Glops of gloop) (Glops per worker)
2021 8 30 2,400
2051 12 30 3,600
Initially, the number of tools per worker was higher in Blahnik than in Gobbledigook. From 2012 to 2032, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Blahnik to rise by a ....... amount than productivity in Gobbledigook. This illustrates the concept of ....... , which makes it ....... for countries with low output to catch up to those with higher output.

Answer 1

Answer and Explanation:

The computation of productivity is shown below:-

Blahnik Productivity        Amount              

Year 2021                           100               (3,000 ÷ 30)

Year 2051                           120               (3,600 ÷ 30)

So the value of Blahnik Year 2021 productivity is 100

and

the value of Blahnik Year 2051 productivity is 120

Gribinez Productivity       Amount

Year 2021                           80               (2,400 ÷ 30)

Year 2051                           120               (3,600 ÷ 30)

So the value of Gribinez Year 2021 productivity is 30

and

the value of Gribinez Year 2051 productivity is 120