Upland has a population of 15,000,of whom 9,000 work 8 hours a day to produce real output of $342,000.Lowland has a population of 8,000,of whom 7,000 work 7 hours a day to produce real output of $171,500.
A)Upland has higher productivity and higher real GDP per person than Lowland.
B)Upland has higher productivity but lower real GDP per person than Lowland.
C)Upland has lower productivity but higher real GDP per person than Lowland.
D)Upland has lower productivity and lower real GDP per person than Lowland.

Question

Quizplus · Accepted Answer

Productivity is determined by the ratio of real output to the number of hours worked. 
For Upland, productivity = $342,000 / (9,000 x 8) = $4.75 per hour worked 
For Lowland, productivity = $171,500 / (7,000 x 7) = $3.26 per hour worked

Therefore, Upland has a higher productivity than Lowland.

Real GDP per person is calculated by dividing the real output by the population. 
For Upland, real GDP per person = $342,000 / 15,000 = $22.80 
For Lowland, real GDP per person = $171,500 / 8,000 = $21.44

Therefore, Upland also has a higher real GDP per person than Lowland.

Thus, option A is the correct choice.

Upland Has a Population of 15,000,of Whom 9,000 Work 8