### What is the level of productivity in economy

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##### Reference no: EM13498542

Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output:

Input
Quantity
Real
GDP
300.00 \$400
225.00 300
150.00 200

a. What is the level of productivity in this economy?

b. What is the per-unit cost of production if the price of each input unit is \$5?

\$

c. Assume that the input price increases from \$5 to \$6 with no accompanying change in productivity.

What is the new per-unit cost of production?

\$

In what direction would the \$1 increase in input price push the economy's aggregate supply curve?

The aggregate supply curve would shift to the .

What effect would this shift of aggregate supply have on the price level and the level of real output?

d. Suppose that the increase in input price does not occur but, instead, that productivity increases by 25% percent. What would be the new per-unit cost of production?

\$

What effect would this change in per-unit production cost have on the economy's aggregate supply curve?

The aggregate supply curve will shift to the .

What effect would this shift of aggregate supply have on the price level and the level of real output?

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