Suppose y = Ak¹/⁴,the capital-labour ratio is $40 000 per worker,the level of total factor productivity is 800,70% of the population works,and there are 70 million workers.Real GDP per worker is

Question

Quizplus · Accepted Answer

The equation for output per worker is y = Ak¹/⁴.

Substituting the given values:

- k = capital/labor = $40,000 
- A = TFP = 800 
- L = 0.7 * 70 million = 49 million

We can solve for output per worker:

y = Ak¹/⁴ = (800)($40,000)¹/⁴ = $11,313.71

Therefore, the answer is (C) $11,313.71.

Suppose Y = Ak¹/⁴,the Capital-Labour Ratio Is $40 000 Per