Question: For three years, there was no technological change in Longland but capital per hour of labour increased from $10 to $20 to $30 and real
For three years, there was no technological change in Longland but capital per hour of labour increased from $10 to $20 to $30 and real GDP per hour of labour increased from $3.80 to $5.70 to $7.13. Then, in the fourth year, capital per hour of labour remained constant but real GDP per hour of labour increased to $10. Does Longland experience diminishing returns? Explain why or why not.
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