For three years, there was no technological change in Longland 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 fourth year, capital per hour of labor remained constant but real GDP per hour of labor increased to $10.
a. Does Longland experience diminishing returns? Explain why or why not.
b. Does Longland conform to the one thrid rule? If so, explain why. If not, explain why not and explain what rule, if any, it does conform to.
c. Explain how you would do the growth accounting for Longland and calculate the effect of technological change on growth in the fourth year described above.