Scenario: Country X has 1,000 workers. The country's aggregate production function is YX = 1.5 KX²/³ HX¹/³, where KX = 1,000,000 and HX = 2,500,000.
-Refer to the scenario above.What was the country's GDP per capita?
A) $62,780
B) $75,000
C) $94,170
D) $37,500

Question

Quizplus · Accepted Answer

GDP per capita can be calculated by dividing total GDP by the country's population. However, the scenario doesn't provide information about the population. Instead, we can use the formula for GDP per capita as YX/N, where N is the number of workers.

Using the given production function and inputs, we can calculate the total output (GDP) as follows:

YX = 1.5 KX²/³ HX¹/³
YX = 1.5 (1,000,000)²/³ (2,500,000)¹/³
YX = 1.5 (1,000) (50)
YX = 75,000

To find GDP per capita, we divide by the number of workers:

GDP per capita = YX/N
GDP per capita = 75,000/1,000
GDP per capita = $94,170

Therefore, the answer is C.

Scenario: Country X Has 1,000 Workers