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Let's consider Minlandia whose sole product is bananas. In Period 1, a total of 1000 little yellow workers worked with 100 baskets to produce 40
Let's consider Minlandia whose sole product is bananas. In Period 1, a total of 1000 little yellow workers worked with 100 baskets to produce 40 million bananas. In Period 2, total production rose to 45 million bananas when 1050 Minions worked with 105 baskets. Assume Minlandia's marginal product of capital (MPK) and marginal product of labor (MPL) are 200000 and 30000 units of bananas respectively. Find the compound growth rate and the contribution of extensive growth (increase in capital and labor) and intensive growth (increase in productivity)
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