If You're So Smart...
The Rich Nations Mystery
Which "Wood" You Choose?
Intro
Intro
Intro
Part 1
Part 1
Part 1
Part 2
Part 2
Part 2
Part 3
Part 3

The Rich Nations Mystery - Part 2

Here is some more information about each country or region.

1: Ukraine

Population: 50,447,719

GDP $161 Billion
GDP per capita $3,170

Area: 603,700 sq km

Natural resources: iron ore, coal, manganese, natural gas, oil, salt, sulfur, graphite, titanium, magnesium, kaolin, nickel, mercury, timber

2: North Korea

Population: 24,317,000

Area: 120,540 sq km

GDP $20.9 Billion
GDP per capita $900

Natural resources: coal, lead, tungsten, zinc, graphite, magnesite, iron ore, copper, gold, pyrites, salt, fluorspar, hydropower

3: China

Population: 1,221,591,778

Area : 9,326,410 sq km

GDP $3,390 Billion
GDP per capita $2,800

Natural resources: coal, iron ore, petroleum, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminum, lead, zinc, uranium, hydropower potential (world's largest)

4: Hong Kong

Population: 6,547,189

Area: 1,092 sq km

GDP $163 Billion
GDP per capita $26,000

Natural resources: outstanding deepwater harbor, feldspar

5: Switzerland

Population: 7,240,463

Area: 41,290 sq km

GDP $161 Billion
GDP per capita $22,600

Natural resources: hydropower potential, timber, salt

6: South Korea

Population: 45,948,811

Area: 98,480 sq km

GDP $647 Billion
GDP per capita $14,200

Natural resources: coal, tungsten, graphite, molybdenum, lead, hydropower

You had to make your choice without all of the information you needed. Now that you have more data, which single figure would you rely on to determine whether a country was rich or poor? Was it GDP (Gross Domestic Product)? GDP is the value of all the goods and services a country produces per year. Which of those above has the highest GDP?

From this group, China has the highest GDP. Most people consider China to be relatively poor. Why?

Consider this: Family A has an income of $80,000 per year. Family B has an income of $ 60,000 per year. Which sounds better? Let's analyze this information: Family A has 2 parents and 8 children. Family B has 2 parents and 1 child. Which family will be able to acquire more goods and services per person? Family A has only $8,000 per person, while Family B has $20,000.

Conclusion: The number of people sharing the income makes a difference.

Likewise, though GDP shows how much output a country produces, the population makes a difference. GDP per capita shows how much output is produced per member of the population. List the countries from the highest GDP per capita to the lowest. GDP per capita shows where people are likely to have the most goods and services per person, and therefore, the highest standard of living.

An Economic Mystery:
How could a country that has fewer resources produce more output per person than a country that has more natural resources? For example, China is rich in natural resources, but has a low per capita GDP (due to its large population). South Korea has fewer natural resources, but still has a higher per capita GDP. How can South Korea have more goods and services than China?

Let's investigate. Read Productivity By Economist Alexander J. Field from the Concise Encyclopedia of Economics.

"What," did Prof. Alexander J. Field say "is the fundamental determinant of the growth of a country's material standard of living?"

  1. What is the prime determinant of the average standard of living in any nation?
  2. What is productivity?
  3. Why does productivity increase the standard of living in a nation?

Once you've thought about these questions, go on to Part 3.