Output per worker is given by yt = A¢k% with a = 1/3. In the year 1900 this country had a capital-labor ratio k1900 equal to 1 and in the year 2000 the same ratio was equal to one half of its level in 1900 due to a terrible civil war. What do you know about the marginal product of capital in 2000 compared to 1900? a. It is the same in both years b. It is lower in 2000 than in 1900 c. It is higher in 2000 than in 1900 d. There is not enough information to decide.

Output per worker is given by yt = A¢k% with a = 1/3. In the year 1900 this country had a capital-labor ratio k1900 equal to 1 and in the year 2000 the same ratio was equal to one half of its level in 1900 due to a terrible civil war. What do you know about the marginal product of capital in 2000 compared to 1900? a. It is the same in both years b. It is lower in 2000 than in 1900 c. It is higher in 2000 than in 1900 d. There is not enough information to decide.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 35P: Say that the average worker in the U.S. economy is eight times as productive as an average worker in...

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