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?

Question

Quizplus · Accepted Answer

Country C has real per capita GDP of ($5,000 × 0.5) = $2,500. If Country E has the same real GDP per capita, then $2,500 = labor productivity (x) times the percentage of population working of .5. Solving for x, we get = $2,500 / 0.4 = $6,250.

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