If production functions are identical, low-income nations have a ____ capital per worker than high-income nations, _____ labor productivity, and a ____ marginal product of capital.
A) lower; lower; higher
B) lower; higher; higher
C) lower; lower; lower
D) higher; higher; lower

Question

Quizplus · Accepted Answer

Low-income nations typically have lower capital per worker, which results in lower labor productivity. However, because they have less capital to begin with, the marginal product of capital (the additional output resulting from an additional unit of capital) is higher compared to high-income nations that already have a lot of capital.

If Production Functions Are Identical, Low-Income Nations Have a ____