Suppose that average labor productivity in Country C is $5,000, and that Countries C and E have the same real GDP per capita. Based on the information in the table, what must be the average labor productivity in Country E?
$$\begin{array} { | c | r | r r }
\hline \text { Country } & \text { Pupulatim (millims) } & { \text { Share of Populatimu Emplayed } } \
\hline \text { A } & 100 & & 60 \
\hline \text { B } & 150 & 55 \
\hline \text { C } & 75 & 50 \
\hline \text { D } & 250 & 45 \
\hline \text { E } & 95 & 40 \
\hline
\end{array}$$

Question

Suppose that average labor productivity in Country C is $5,000, and that Countries C and E have the same real GDP per capita. Based on the information in the table, what must be the average labor productivity in Country E?  
$$\begin{array} { | c | r | r r } 
\hline \text { Country } & \text { Pupulatim (millims) } &  { \text { Share of Populatimu Emplayed } } \
\hline \text { A } & 100 & & 60 \
\hline \text { B } & 150 & 55 \
\hline \text { C } & 75 & 50 \
\hline \text { D } & 250 & 45 \
\hline \text { E } & 95 & 40 \
\hline
\end{array}$$

Quizplus · Accepted Answer

To find the average labor productivity in Country E, given that Countries C and E have the same real GDP per capita, we first calculate the GDP per capita for Country C. The population of Country C is 75 million, with 50% employed, so 37.5 million are employed. With an average labor productivity of $5,000, the total GDP for Country C is $5,000 * 37.5 million = $187.5 billion. The GDP per capita is then $187.5 billion / 75 million = $2,500.For Country E, with a population of 95 million and 40% employed, 38 million are employed. To have the same GDP per capita of $2,500 as Country C, the total GDP for Country E must be $2,500 * 95 million = $237.5 billion. Therefore, the average labor productivity in Country E must be $237.5 billion / 38 million = $6,250.

Suppose That Average Labor Productivity in Country C Is $5,000