Consider two countries, labeled 1 and 2. Each has the production function $Y = \bar { A } _ { i } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$ , i = 1, 2. If the only difference between the two countries is that A₁ A₂, A) Country 2 will not produce anything, ceteris paribus. B) Country 2 will produce more than Country 1, ceteris paribus. C) Country 1 will produce more than Country 2, ceteris paribus. D) Each will produce the same amount, ceteris paribus. E) Not enough information is given.

Question

Consider two countries, labeled 1 and 2. Each has the production function $Y = \bar { A } _ { i } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$ , i = 1, 2. If the only difference between the two countries is that A₁ > A₂, A) Country 2 will not produce anything, ceteris paribus. B) Country 2 will produce more than Country 1, ceteris paribus. C) Country 1 will produce more than Country 2, ceteris paribus. D) Each will produce the same amount, ceteris paribus. E) Not enough information is given.

Quizplus · Accepted Answer

The Answer is C

Consider Two Countries, Labeled 1 and 2 Y=AˉiKˉ1/3L2/3Y = \bar { A } _ { i } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }Y=Aˉi​Kˉ1/3L2/3

Consider Two Countries, Labeled 1 and 2 $Y = \bar { A } _ { i } \bar { K } ^ { 1 / 3 } L ^ { 2 / 3 }$