Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 25, Problem 7SPPA
To determine
To explain:
The way an increase in human capital affect the productivity of labor, the reason for a rise in diminishing return with an example and graph of the productivity curve.
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Chapter 25 Solutions
Foundations of Economics (8th Edition)
Ch. 25 - Prob. 1SPPACh. 25 - Prob. 2SPPACh. 25 - Prob. 3SPPACh. 25 - Prob. 4SPPACh. 25 - Prob. 5SPPACh. 25 - Prob. 6SPPACh. 25 - Prob. 7SPPACh. 25 - Prob. 8SPPACh. 25 - Prob. 9SPPACh. 25 - Prob. 10SPPA
Ch. 25 - Prob. 11SPPACh. 25 - Prob. 12SPPACh. 25 - Prob. 1IAPACh. 25 - Prob. 2IAPACh. 25 - Prob. 3IAPACh. 25 - Prob. 4IAPACh. 25 - Prob. 5IAPACh. 25 - Prob. 6IAPACh. 25 - Prob. 7IAPACh. 25 - Prob. 8IAPACh. 25 - Prob. 9IAPACh. 25 - Prob. 10IAPACh. 25 - Prob. 1MCQCh. 25 - Prob. 2MCQCh. 25 - Prob. 3MCQCh. 25 - Prob. 4MCQCh. 25 - Prob. 5MCQCh. 25 - Prob. 6MCQCh. 25 - Prob. 7MCQCh. 25 - Prob. 8MCQ
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- Xplain how advances in technology change labor productivity. Do diminishing returns arise? Provide an example of an advance in technology. Use a graph of the productivity curve to illustrate your answer.arrow_forward0.5 0.5 Given a production function: Y = AK N If output grows at 5%, capital grows at 2% and the number of workers grows at 4%, then technology (or total factor productivity) grows at % ? (Answer in integer only, no decimal place.) Your Answer: Answer Given a production function: Y = AK0.5 N0.5. If output grows at 5%, capital grows at 2% and the number of workers grows at 4%, then technology (or total factor productivity) grows at %? (Answer in integer only, no decimal place.) Your Answer: Answerarrow_forwardAn increase in labor productivity means businesses will produce more output with the same amount of labor. Explainarrow_forward
- For each of the following, identify which inputs into the production function changed(i.e., Physical Capital, Human Capital, or Labor). Also identify whether this phenomenon will increase or decrease economic growth.(a) The government increases federal aid for students to go to college.(b) States embark on a program to increase charging networks for electric cars.(c) A big chunk of the population decides to drop out of the workforce to spend moretime playing video games.arrow_forwardSuppose you are given data on the rate of growth of GDP, capital, and labour, and the share of these two factors in GDP. How would you calculate the contribution of Total Factor Productivity to growth? Explain it verbally and formally.arrow_forwardTrue or False A production function in "economics" summarizes the technological relationship between inputs and outputs.arrow_forward
- Capital Goods U W 0 F B Consumer Goods D Refer to the above diagram. Negative economic growth can be shown by a:arrow_forwardConsider the per-worker production function graph. If there is an increase in capital per hour worked, holding technology constant, then A. there is a movement from A to B. B. there is a movement from A to C. C. there is a movement from B to D. D. there is a movement from D to C. If there is an increase in technology, holding constant the quantity of capital per hour worked, then A. there is a movement from C to D. B. there is a movement from A to B. C. there is a movement from D to B. D. there is a movement from A to C. C Real GDP per hour worked (Y/L) 10- Y/L2 Y/L₁ Per-Worker Production Function C 3 B Per Worker Production Function 1 K/L₁ K/L₂ Capital per hour worked (K/L) 10arrow_forwardWrite the production function in its simplest form (human capital being included in TFP) and explain the nature of each factor as well the theoretical value of the parameter Alpha. In other words what does the value of Alpha represent regarding the returns of each factors of production?arrow_forward
- Suppose an economy’s production function is Y = AKαL1−α. If the annual rate of economic growth is 3.5 per cent and labour and capital are both growing by 2 per cent annually, what contribution to growth is made by total factor productivity? You can assume that labour receives 75 per cent of the total income generated in this economy.arrow_forwardFor a given level of technology, the level of labor productivity would increase in all of the following situations except when: A. there is an increase in natural resources per worker B. there is an increase in human capital per worker C. there is an increase in physical capital per worker D. there is an increase in laborarrow_forwardThe aggregate production function is y=3KL. If they are 30 units of capital and 40 units of labor, what is aggregate output? What is labor productivity? What is capital productivity?arrow_forward
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