Question: Please help with this question (*) Suppose the production function takes the form y = ART1-a, and we measure income differences between two countries by
Please help with this question

(*) Suppose the production function takes the form y = ART1-a, and we measure income differences between two countries by A = In(yrich ) - In(ypoor ), where yrich is per capita GDP of the rich country and poor per capita GDP of the poor country. Assuming the two countries have the Same productivity, then A is equal to O a (In(krich ) - In(kpoor) ) O (1 - a) In(krich + kpoor) O In(krich) In ( kpoor ) CF In(krich -kpoor) 1-a O (1 - a) (In(krich) + In(kpoor))
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
