Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years.
Complete the table by calculating physical capital per worker as well as labor productivity.

Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Year Physical Capital Labor Force Physical Capital per Worker Labor Hours Output Labor Productivity (Fishing poles) (Workers) (Fishing poles) (Hours) (Fish) (Fish per hour of labor) 2027 300 100 3 5,000 45,000 9 2028 480 120 4 4,200 50,400 12

Based on your calculations, in physical capital per worker from 2027 to 2028 is associated with in labor productivity from 2027 to 2028.

Suppose you're in charge of establishing economic policy for this small island country.

Which of the following policies would lead to greater productivity in the weaving industry?

a. Imposing restrictions on foreign ownership of domestic capital
b. Offering free public education to every worker in the country
c. Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts
d. Imposing a tax on looms