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Suppose an economy has 100 units of capital, 100 units of labor, and the efficiency of each worker is equal to 2. The effective number of workers for this economy is _____ and the capital per effective worker is _____.

Answer :

The effective number of workers for this economy is 200 and the capital per effective worker is 0.5.

To determine the effective number of workers and capital per effective worker in the given economy, we need to calculate the effective labor and effective capital.

Effective labor = Total labor * Efficiency

Effective labor = 100 units of labor * 2

Effective labor = 200 units

Effective capital = Total capital

Effective capital = 100 units of capital

The effective number of workers is 200, and the capital per effective worker is 0.5 (100 units of capital divided by 200 effective workers).

Therefore:

Effective number of workers = 200

Capital per effective worker = 0.5

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