Based on a Cobb-Douglas Production Function and Perfect Capital Mobility

question 5

Multiple Choice

Based on a Cobb-Douglas production function and perfect capital mobility, capital should flow to economies where:

• A)capital is relatively scarce.
• B)capital is relatively abundant.
• C)technological production capabilities are inferior.
• D)labor is relatively scarce.

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Definitions:

New Belgium Brewing Company

An American brewery known for its craft beers and environmental sustainability practices, including employee ownership and energy-efficient operations.

Direct Labor Hours

The total hours worked by employees who are directly involved in the manufacturing or production process.

Machine Hours

Machine hours refer to the total time that a machine is operated during a specific period, often used as a basis for allocating manufacturing overhead costs in cost accounting.

Units of Production

A method of depreciation that allocates the cost of an asset over its useful life based on the number of units it produces.