Use the Data in the Exhibit to Complete a and B

question 88

Essay

Use the data in the exhibit to complete a and b.
Exhibit: Factors of Production Data $$\begin{array} { l r c c c } \text { Period } & Y & K & L & \text { Share of Labor in Output } \\1 & 100 & 200 & 100 & 0.5 \\1 & 106 & 205 & 102 & 0.5 \\3 & 111 & 210 & 104 & 0.5 \\4 & 110.5 & 215 & 104 & 0.5 \\5 & 110 & 220 & 104 & 0.5\end{array}$$ a. Compute and report the value of growth in total factor productivity $( ( A t - A t - 1 ) / A t - 1 )$ in each period from periods 2 through 5 . If the value of A is 1.000 in period 1 , also report the value of A in each period.
b. Does the value of A rise in each period? If it declines, do you think this decline is because technological progress works backward? If so, explain your answer. If not, provide another explanati on.

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Definitions:

Experiment

Rigorously controlled, replicable procedure in which the researcher manipulates variables to assess the effect of one on the other.

Manipulation

The ability to handle objects with control and intention, often requiring fine motor skills.

Independent Variable

The variable in an experiment that is manipulated or changed to observe its effect on the dependent variable.

Dependent Variable

In an experiment, the variable that is being measured or tested to see if it is affected by changes in another variable.