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 3,000 work 7 hours a day to produce a total of 105,000 final goods.

Answer 1

Workland has lower productivity but higher real GDP per person than Laborland.

Explanation:

Consider the provided information.

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.

Productivity = Output / Input

For Workland productivity is:

`(224,000)/(7,000 * 8)=(224,000)/(56,000)= 4`

Laborland has a population of 5,000, of whom 3,000 work 7 hours a day to produce a total of 105,000 final goods.

For Laborland, productivity is:

`(105,000 )/(3,000* 7)=(105,000 )/(21,000 )= 5`

Thus, Laborland has higher productivity .

To figure real GDP per person, divide output by population:

For Workland,

`(224,000)/(10,000)= 22.4`

for Laborland,

`(105,000 )/(5,000 )= 21`

Thus, Workland has a higher real GDP per person.