3. Productivity and growth policies

Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years.

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.

Physical Capital Labor Force Physical Capital per Worker Labor Hours Output Labor Productivity Year (Looms) (Workers) (Looms) (Hours) (Garments) (Garments per hour of labor) 2016 40 20 1,000 6,000 2017 120 40 1,400 12,600