Homework From Econ 1740 Questions Assignment (Coursework Sample)
It's a homework from Econ 1740. Answer 4 questions. It's kind of in a hurry.source..
Course: Econ 1740
Instructor: Бlvaro La Parra Pйrez
Problem Set 1
Y=A (L 0.5) (T 0.5)
Y = Output.
A = Level of technology reflecting the state of knowledge in agriculture.
L = Quantity of labor (workers) in the economy.
T = Quantity of land (in acres).
Assume that A=100 throughout the whole problem set.
That is, if we had x workers and y acres of land, total output would be equal to: 100(x0.5) (y0.5). Note that the “0.5”s are exponents (they are not multiplying).
How does the land/labor ratio affect labor productivity in an agrarian economy? and land productivity?
The land/labor ratio affects the agrarian economy because this affects agriculture as the economy is farm based. The retention of labor in agriculture reduces the land-labor rations, which then represses productivity in the agrarian economy when there is a high rate of labor to land.
When there is is no labor efficiency, the land productivity is low, but increasing the land/ labor ratio is nearly impossible as there is no transfer of labor out of agriculture. There is also few land saving technologies in the agrarian societies making it difficult to improve labor and land productivity.
2. What's the land/labor ratio (that is, the quantity of acres per worker) in this economy?
How much output will John and Douglass produce if they work the 4 acres of land? In order to find it, remember that A=100. Find the output per worker in this economy with only two persons. What's the output per acre?
Land/labor ratio= 4 acres/ 2 workers= 2
Output= Y=A (L 0.5) (T 0.5)( Y=100(2 0.5) (4 0.5) =282.8
Labor productivity (output per worker), Y/L=f (T/L) =(T/L)0.5 (L/L)0.5( y=k1/2
This is 282.8/2= 142
Output per acre=282.82/4=71
3. Now assume that John and Douglass' wives arrive in Virginia. Assume that the wives also help to work the land (i.e. now we have four workers in our economy) but the quantity of land stays constant. "A" also remains at 100. What's the new land/labor ratio
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