Question: 6. Output per worker is given by = with = 1/3 . Last year this country had a capital-labor ratio 2021 equal to 3. This
6. Output per worker is given by = with = 1/3 . Last year this country had a capital-labor ratio 2021 equal to 3. This year (2022) a hurricane hit reducing the capital-labor ratio to 2. What do you know about the marginal product of capital after the hurricane compared to before? a. It is the same in both years b. It is lower in 2022 than in 2021 c. It is higher in 2022 than in 2021 d. It has been reduced by 1/3. e. There is not enough information to decide.
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
