Question

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 4,000 work 12 hours a day to produce a total of 120,000 final goods. a. Workland has higher productivity and higher real GDP per person than Laborland.b. Workland has higher productivity but lower real GDP per person than Laborland.c. Workland has lower productivity but higher real GDP per person than Laborland.d. Workland has lower productivity and lower real GDP per person than Laborland.

Answer 1

B.

Step-by-step explanation:

To find the GDP/person, first we need to find the GDP. In this case, the problem gives us this number by giving us the production of each country. Then, to find the GDP/person we divide that GDP by the population of each country.

Workland: GDP=224000 population=10000

GDP/person= 224000/10000= 22.4

Laborland: GDP 120000 population=5000

GDP/person= 120000/50000= 24

Laborland has a greater GDP/person than Workland.

To find productivity, we use the number of people needed to produce the final goods and the number of hours they worked.

Workland:

224000/7000= 32 units per person

32/8= 4 units per hour (each person)

Laborland:

120000/4000= 30 units per person

30/12= 2.5 units per hour (each person)

Productivity in this case is measured by the number of units that each person can produce in one hour. The data shows that people in Workland are more productive because they can produce 4 units in one hour, while people in Laborland only produce 2.5 units in one hour. Workland is more productive than Laborland