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4. The catch-up effect Consider the hypothetical economies of Hestiatia and Svarta, both of which produce cases of argo using only workers and tools. Suppose
4. The catch-up effect Consider the hypothetical economies of Hestiatia and Svarta, both of which produce cases of argo using only workers and tools. 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. Hestiatia Physical Capital Labor Force Output Productivity Year (Tools per worker) (Workers) (Cases of argo) (Cases per worker) 2021 19 60 6,000 2051 23 60 7,200 Svarta Physical Capital Labor Force Output Productivity Year (Tools per worker) (Workers) (Cases of argo) (Cases per worker) 2021 16 60 4,800 2051 20 60 7,200 Initially, the number of tools per worker was higher in Hestiatia than in Svarta. From 2021 to 2051, capital per worker rises by 4 units in each country. The 4-unit change in capital per worker causes productivity in Hestiatia to rise by a the amount than productivity in Svarta. This illustra effect
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