Industrial Production (a) Economists often use the expression expression "rate
of growth" in relative rather than absolute terms. For example, let \(u=f(t)\)
be the number of people in the labor force at time \(t\) in a given industry.
(We treat this function as though it were differentiable even though it is an
integer-valued step function.)
Let \(v=g(t)\) be the average production per person in the labor
force at time \(t .\) The total production is then \(y=u v\) .
If the labor force is growing at the rate of 4\(\%\) per year year \((d u / d t=\)
0.04\(u\) ) and the production per worker is growing at the rate of
5\(\%\) per year \((d v / d t=0.05 v),\) find the rate of growth of the total
production, y.
(b) Suppose that the labor force in part (a) is decreasing at the
rate of 2\(\%\) per year while the production per person is increasing
at the rate of 3\(\%\) per year. Is the total production increasing, or
is it decreasing, and at what rate?