Country A and country B have the same Cobb-Douglas production function except country A has a capital stock of 5,000, a population of 12,000 and employment of 10,000. Country B has a capital stock of 8,000, a population of 24,000 and employment of 20,000. Technology, national saving rate, depreciation rate and population growth rate are the same in the two countries Today country B has a higher standard of living but country A will catch up. Today country B has a higher standard of living and country A will not catch up. Today country A has a higher standard of living but country B will catch up. Today country A has a higher standard of living and country B will not catch up.

Country A and country B have the same Cobb-Douglas production function except country A has a capital stock of 5,000, a population of 12,000 and employment of 10,000. Country B has a capital stock of 8,000, a population of 24,000 and employment of 20,000. Technology, national saving rate, depreciation rate and population growth rate are the same in the two countries Today country B has a higher standard of living but country A will catch up. Today country B has a higher standard of living and country A will not catch up. Today country A has a higher standard of living but country B will catch up. Today country A has a higher standard of living and country B will not catch up.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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