An economist fits the following production function to data from Australia and New Zealand, 1-a Y = AKª L'-« She estimate that for Australia, a = 0.7. She estimates that for New Zealand, a = 0.2 %3D Based on this information, which of the following statements is most likely to be correct. There is not enough information to comment on the relative capital intensities Production will be relatively more capital intensive in New Zealand than in Australia Production will be relatively more capital intensive in Australia than in New Zealand Production will be equally as capital intensive in each country since they both experience constant returns to scale
An economist fits the following production function to data from Australia and New Zealand, 1-a Y = AKª L'-« She estimate that for Australia, a = 0.7. She estimates that for New Zealand, a = 0.2 %3D Based on this information, which of the following statements is most likely to be correct. There is not enough information to comment on the relative capital intensities Production will be relatively more capital intensive in New Zealand than in Australia Production will be relatively more capital intensive in Australia than in New Zealand Production will be equally as capital intensive in each country since they both experience constant returns to scale
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 9E
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