Question

Assume that the hypothetical economy of econoland has 6 workers in year 1, each working 1,400 hours per year (40 weeks at 35 hours per week). The total input of labor is 8,400 hours. Productivity (average real output per hour of work) is $10 per worker. What is the total output of econoland in year 1?

Answer 1

The total output of Econoland in year 1 is calculated by multiplying the total labor input in hours (8,400 hours) by the productivity per hour ($10), resulting in a total output of $84,000.

Step-by-step explanation:

To calculate the total output of Econoland in year 1, we need to use the available data on labor input and productivity per worker. We know that there are 6 workers, each working for 1,400 hours a year, and the productivity is $10 per hour per worker.

First, we find the total labor input in hours, which is the number of workers multiplied by the hours worked per year by each worker:

• 6 workers × 1,400 hours per worker = 8,400 total labor hours

Then, to find the total output, we multiply the total labor hours by the productivity per hour:

• 8,400 hours × $10 per hour = $84,000

Therefore, the total output of Econoland in year 1 is $84,000.