Scenario: Assume the Following Aggregate Production Functions for Two Countries

question 11

Multiple Choice

Scenario: Assume the following aggregate production functions for two countries, A and B, respectively.
YA=A KA¹/² ᴴA¹/²
ʸB=A KB²/³ ᴴB¹/³
-Refer to the scenario above.What is true about the aggregate production functions?

• A) Country A's production function has higher returns to scale.
• B) Country B's production function has higher returns to scale.
• C) Both countries' production functions have equal returns to increases in K and H.
• D) Both countries' production functions have constant returns to scale.

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