Country X has 1,000 workers. The countryʹs aggregate production function is Y X = 1.5 K X 2/3 H X 1/3 , where K X = 1,000,000 and H X = 2,500,000.
-Refer to the scenario above. What was the country's GDP per capita?

Question

Quizplus · Accepted Answer

The country's GDP per capita is calculated by substituting the given values into the aggregate production function and then dividing by the number of workers. The production function is $Y = 1.5K^{2/3}H^{1/3}$, where $K = 1,000,000$ and $H = 2,500,000$. Substituting these values gives $Y = 1.5 \times (1,000,000)^{2/3} \times (2,500,000)^{1/3}$, which calculates to a GDP of $94,170,000$. Dividing this by the number of workers (1,000) gives a GDP per capita of $94,170.

Country X Has 1,000 Workers