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Country X and Country Y Are Both Efficient in Production

question 50

Essay

Country X and Country Y are both efficient in production. Country X devotes one third of its resources to accumulating capital and the other three fourth to consumption. Country Y devotes one fourth of its resources to accumulating capital and two thirds to consumption. Which country will grow faster? In which country the opportunity cost of economic growth is higher? Explain.


Definitions:

Diol

An organic compound containing two hydroxyl groups (-OH) attached to different carbon atoms.

Antifreeze

A substance added to liquids, such as the water in a vehicle's radiator, to lower the freezing point and prevent it from freezing.

IUPAC Name

The systematic name assigned to a chemical substance, following rules established by the International Union of Pure and Applied Chemistry (IUPAC).

Thiol

Thiol is an organic compound containing a sulfhydryl (-SH) group attached to a carbon atom.

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