Two Countries,Rhodia and Rubium,have Identical Production Functions in the Form

question 5

Multiple Choice

Two countries,Rhodia and Rubium,have identical production functions in the form Y = A × K⁰.²⁵ × H⁰.⁷⁵,where Y denotes total output,A denotes the level of technology,K denotes the physical capital stock,and H denotes the efficiency units of production.Both countries have the same amount of physical capital stock and use the same technology.However,the total efficiency units of labor in Rhodia is higher than that in Rubium.Which of the following is likely to be true in this case?

• A) The GDP of Rhodia is higher than that of Rubium.
• B) The GDP of Rubium is higher than that of Rhodia.
• C) The Human Development Index of Rhodia is lower than that of Rubium.
• D) The poverty rate in Rhodia is likely to be higher than that in Rubium.

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Definitions:

Variance

A measure of the dispersion of a set of data points around their mean value, calculated as the average of the squared differences from the mean.

Population

The entire group of individuals or instances about whom the research is concerned or from which the data is collected.

Mean

The average of a set of numbers, calculated by dividing the sum of all values by the quantity of values.

Bell Shaped Distribution

Also known as a normal distribution, it is a probability distribution that has a symmetrical bell-shaped graph, indicating that most of the data points are concentrated around the mean.