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4. The catch-up effect COI'ISIdEi' the hypothetical economies Of Hermes and Pelhelrn. both Of which produce cases of argo using only WUFKEI'S and tools. Suppose

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4. The catch-up effect COI'ISIdEi' the hypothetical economies Of Hermes and Pelhelrn. both Of which produce cases of argo using only WUFKEI'S and tools. Suppose that, during the course of 15 years, the level of physical capital per worker rises by 3 tools per worker in each economy, but the size of each labor force remains the same. Complete the foitowing tables by entering productivity (in terms of output per worker) For each economy in 2020 and 2035. Hermes Physical Capital Labor Farce Output Productivity Year {Toots per worker) (Workers) (Cases of ergo) ( Cases per worker) 2020 22 80 4.800 2035 25 30 5,?60 i: Pelheim Physical Capital Labor Force Output Productivity Year (Tools per worker) (Workers) {Cases of ergo) { Cases per worker) 2020 25 so 5,400 i: 2035 28 30 6,830 Initially. the number of tools per worker was lower in Hermes than in Pelheim. From 2020 to 2035. capital per worker rises by 3 units in each country. The 3unit change in capital per worker causes productivity in Hermes to rise by a Y amount than productivity in Pelheirn. This illustrates the V effect

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