If Two Nations Have Identical Production Functions, as Indicated by Free

question 65

Multiple Choice

If two nations have identical production functions, as indicated by free flows of information, what happens when the marginal product of labor (MPL) in one nation is lower than the MPL in the other?

• A) The MPK must be lower.
• B) The MPK must be higher.
• C) The MPL will continue to decline while the other continues to rise.
• D) The marginal product of both labor and capital will be equal.