Scenario: Two Economies, a and B, Have Identical Aggregate Production

Multiple Choice

Scenario: Two economies, A and B, have identical aggregate production functions with diminishing returns. In both economies, capital and labor are equally important for production. Economy A has twice as many efficiency units of labor as economy B. Economy B has twice as much physical capital stock as economy A.
-Refer to the scenario above.If population doubles and GDP remains unchanged,the economies' ________.

A) GDP per capita will increase
B) average standard of living will decrease
C) income per capita will remain unchanged
D) productivity will increase