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.Which of the following statements is true?

A) Productivity must be greater in economy A.
B) The relationship between GDP and total efficiency units of labor must be the same in economies A and B.
C) The relationship between GDP and physical capital stock cannot be the same in economies A and B.
D) All of the above.