Question
In a hunting village there are five arrow makers and five hunters. The arrow makers spend the entire Monday of every week discussing ways to
In a hunting village there are five arrow makers and five hunters. The arrow makers spend the entire Monday of every week discussing ways to improve the arrows and testing prototypes. In the rest of the week each of them builds one arrow, based on the latest design from Monday. Each arrow only lasts for one week. This means that each hunter leaves the village for the weekly hunt with one and only one arrow, the arrow lasts for the entire duration of the hunt, but by the end of the week it has suffered too much wear and tear to be used again in the following week. Assume that the marginal productivity of R&D is decreasing. Do not worry about possible issues of competition among the arrow makers. In this village,
a) GDP per worker increases over time
b) The growth rate of GDP per worker decreases over time
c) The marginal product of capital increases over time
d) Consumption is constant
There may be more than one correct answer.
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