The country of Androde is currently using Method 1 for its production function. By chance, scientists stumble
Question:
The country of Androde is currently using Method 1 for its production function. By chance, scientists stumble onto a technological breakthrough that will enhance Androde’s productivity. This technological breakthrough is reflected in another production function, Method 2.
The accompanying table shows combinations of physical capital per worker and output per worker for both methods, assuming that human capital per worker is fixed.
Method 1 Method 2 Physical capital per worker Real GDP per worker Physical capital per worker Real GDP per worker 0 0.00 0 0.00 50 35.36 50 70.71 100 50.00 100 100.00 150 61.24 150 122.47 200 70.71 200 141.42 250 79.06 250 158.11 300 86.60 300 173.21 350 93.54 350 187.08 400 100.00 400 200.00 450 106.07 450 212.13 500 111.80 500 223.61
a. Using the data in the accompanying table, draw the two production functions in one diagram. Androde’s current amount of physical capital per worker is
Step by Step Answer:
Essentials Of Economics
ISBN: 9781429278508
3rd Edition
Authors: Paul Krugman, Robin Wells, Kathryn Graddy