In Econland population increased from 1 million to 1.1 million, the number of employed workers increased from 500,000 to 600,000, but average labor productivity decreased from $20,000 per worker per year to $18,000 per worker per year. Total output in Econland ________ and the average standard of living ________.

Question

Quizplus · Accepted Answer

Total output, which is the average labor productivity per worker times the number of workers, increased from $10 billion (500,000 × $20,000)to $10.8 billion (600,000 × $18,000). At the same time, the average standard of living, which is total output per person, decreased from $10,000 ($10 billion/1 million)to $9,818 ($10.8 billion/1.1 million).

In Econland Population Increased from 1 Million to 1