Scenario: Two Neighboring Countries, Sweetland and Sourland, Are Identical in Terms

question 120

Multiple Choice

Scenario: Two neighboring countries, Sweetland and Sourland, are identical in terms of size, population (800,000) , education of workforce, and value of natural resources owned.
-Refer to the scenario above.Holding physical capital stock constant,Sweetland's aggregate production function lies above Sourland's production function.This implies that costs of producing the same amount of output ________.

• A) are greater in Sourland
• B) are greater in Sweetland
• C) are the same in Sourland and Sweetland
• D) are increasing faster in Sweetland

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