Attempts: Keep the Highest: /3 4. The catch-up effect Consider the economies of

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Attempts: Keep the Highest: /3 4. The catch-up effect Consider the economies of Hermes and Tralfamadore, both of which produce gaggles of gop using only tools and workers. Suppose that, during the course of 20 years, the level of physical capital per worker rises by 5 tools per worker in each economy, but the size of each labor force remains the same Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2012 and 2032. Hermes Physical Capita (Tools per worker) bor Force Output (Gaggles of gop) 1,800 2,160 Productivity (Gaggles per worker) Year 2012 2032 (Workers) 30 30 16 Tralfamadore Physical Capita (Tools per worker) 8 13 bor Force Output (Gaggles of gop) 900 1,620 Productivity (Gaggles per worker) Year 2012 2032 (Workers) 30 30 Initially, the number of tools per worker was higher in Hermes than in Tralfamadore. From 2012 to 2032, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Hermes to rise by a This illustrates the amount than productivity in Tralfamadore effect.

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a) 16%

Hermes Year Productivity 2012 60 2032 72

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