*3 In Longland, described in problem 1, capital per hour of labour in 1999 was £40 and real GDP per hour of labour was £8.31. In 2001, capital per hour of labour had increased to £50 and real GDP per hour of labour had increased to £10.29 an hour.

a Does Longland experience diminishing returns? Explain why or why not. b Use growth accounting to find the contribution of the change in capital between 1999 and 2001 to the growth of productivity in Longland. c Use growth accounting to find the contribution of technological change between 1999 and 2001 to the growth of productivity in Longland.