Suppose that average labor productivity in Country C is $6,000, and that Countries C and A have the same real GDP per capita. Based on the information in the table, what must be the average labor productivity in Country A?

Question

Quizplus · Accepted Answer

Country C has 50% of its population working and labor productivity is $6,000, so real per capita GDP is ($6,000 × 0.50) = $3,000. Country A has the same real GDP per capita and has 60% of its population working, so: average labor productivity × 0.60 = $3,000, and average labor productivity equals $3,000 / .6 = $5,000.

Suppose That Average Labor Productivity in Country C Is $6,000