Given That All Countries Have the Same Cobb-Douglas Production Function,i

question 10

Multiple Choice

Given that all countries have the same Cobb-Douglas production function,i.e.Y/N = (K/N) b,where b = 0.5,then a ten-fold difference in per capita income requires a difference in capital per capita by a factor of

• A)10.
• B)100.
• C)1000.
• D)10,000.

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Definitions:

Isoquant Map

An isoquant map is a graphical representation used in economics to show combinations of inputs, like labor and capital, that produce the same level of output, illustrating how inputs can be substituted for one another.

Machine Hours

A measure of production output or usage expressed in terms of the total hours that machines are operated within a specified period.

Fixed Proportion

A production scenario where inputs must be used in specific, unchangeable ratios to produce output, often resulting in a limitation on the flexibility of the production process.

Isoquant Map

A graphical representation showing different combinations of inputs that produce the same level of output.