For 3 years there was no technological change in Londonland but capital per hour of labor increased from $10 to $20 to $30 and real GDP per hour of labor increased from $3.80 to $5.70 to $7.13. Then, in the 4th year, capital per hour of labor remained constant but real GDP per hour of labor increased to $10.
A. Does Londonland experience diminishing returns? why or why not
B. Does Londonland confomr to the one third rule? why or why not and if not, explain what rule it does conform to.
C. Explain how you would do the growth accounting for Londonland and calculate the effect of technological change on the growth in the 4th year- as described above.