If an Economy Has 2,000 Workers with Each Working 3,000

question 21

Essay

If an economy has 2,000 workers with each working 3,000 hours per year and the average real output per worker-hour is $10, what is real GDP?

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Definitions:

Machine Hours

A measure of the amount of time a machine is utilized during the production of goods, often used to allocate manufacturing overhead.

Productive Capacity

The maximum output a system can produce over a given period under normal conditions, reflecting its efficiency and effectiveness.

Variable Costs

Costs that change in proportion to the level of activity or volume of production within a business.

Additional Processing Costs

Costs incurred when further processing is done on a product after an initial manufacturing phase, often enhancing its value.