Consider the economies of Blahnik and Gobbledigook, both of which produce glops of gloop using only tools and workers. Suppose that, during the course of 40 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 2013 and 2053.
Year
Blahnik
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Glops of gloop) (Glops per worker)
2013 11 30 1,800
2053 16 30 2,160
Year
Gobbledigook
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Glops of gloop) (Glops per worker)
2013 8 30 900
2053 13 30 1,620
Initially, the number of tools per worker was higher in Blahnik than in Gobbledigook. From 2013 to 2053, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Blahnik to rise by a _______ amount than productivity in Gobbledigook. This illustrates the concept of ______, which makes it ______ for countries with low output to catch up to those with higher output.
