Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 3, Problem 1NP
(a)
To determine
Percentage change in total factor productivity between given years.
(b)
To determine
Marginal product of labor between 1960 and 2010.
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Suppose a country has a population of 120 people, a working-age population of 100 people, its labor force participation rate is 0.5 (50%), and the quantity of output is 60 units. Suppose that the production function of the economy is given by Y=2N, where Y represents the quantity of output and N represents the number of workers needed to produce the output.
I know the answer is 0.4 but I don't understand how to get it. Thank you!
The following data give real GDP, Y, capital, K, and labor, N, for the U.S. economy in various years.
Year
1970
1980
1990
2000
2010
Assume that the production function is Y= AK⁰.3 Nº.7
Calculate the growth rate of total factor productivity in each decade.
Between 1970 and 1980, U.S. total factor productivity grew by
Between 1980 and 1990, U.S. total factor productivity grew by
Y
K
3434
3800
5243
5800
7144
8000
10,039
10,400
11,825 12,000
N
79
101
123
135
156
13.31 %. (Enter your answer as a percentage rounded to one decimal place.)
%. (Enter your answer as a percentage rounded to one decimal place.)
The following data give real GDP, Y, capital, K, and labor, N, for the U.S. economy in various
years. Units and sources are the same as in Table 3.1. Assume that the production function
is Y-AK0.3N0.7
Year
1970
1980
1990
K
5600
8055
10,946
2000 13,131 14,711 137
2010 15,599 17,682 139
●
Y
4951
6759
9365
L
79
99
119
(a) Calculate total factor productivity (A). By what percentage did U.S. TFP grow:
between 1970 and 1980?
between 1980 and 1990?
between 1990 and 2000?
between 2000 and 2010?
(b) Plot the short-run production function while keeping capital fixed at the 1970 level.
(c) What happened to the marginal product of labor between 1970 and 2010?
HINT: Calculate the marginal product numerically as the extra output gained by adding 1
million workers in each of the two years. (The data for employment, N, are measured in
millions of workers, so an increase of 1 million workers is an increase of 1.0.)
Chapter 3 Solutions
Macroeconomics
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - Prob. 1NPCh. 3 - Prob. 2NPCh. 3 - Prob. 3NPCh. 3 - Prob. 4NPCh. 3 - Prob. 5NPCh. 3 - Prob. 6NPCh. 3 - Prob. 7NPCh. 3 - Prob. 8NPCh. 3 - Prob. 9NPCh. 3 - Prob. 10NPCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Prob. 4APCh. 3 - Prob. 5APCh. 3 - Prob. 6APCh. 3 - Prob. 7AP
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