1) Generally speaking GDP per capita (a) Is higher the closer you get to the equ
ID: 1131723 • Letter: 1
Question
1) Generally speaking GDP per capita
(a) Is higher the closer you get to the equator
(b) Is lower the closer you get to the equator South America
(c) Is lower in the northern hemisphere that in the southern hemisphere
(d) Is highest above the Arctic circle
(e) Is unrelated to latitude
2) Suppose the economy has TFP = 10, there are 400 hours worked, and 60 unit of capital and 210 units of land the Cobb-Douglas production is:
Output = TFP x Hours0.3 x Capital0.3 x Land0.2.
Output is currently about
(a) 36,000
(b) 600
(c) 12,000
(d) 1,800
(e) 6,000
3) If human capital were the same in all countries
(a) rates of return on investment would be the same in developed and less-developed countries
(b) industrial nations would invest in less-developed countries
(c) less developed countries would invest in the industrial nations
(d) industrial nations would continue to grow more rapidly than less-developed countries
(e) there would be no incentive for international trade
4) In which respect is human capital unlike physical capital?
(a) human capital does not depreciate
(b) the stock of human capital cannot be increased
(c) human capital cannot be measured
(d) human capital does not affect output
(e) none of the above
(a) Is higher the closer you get to the equator
(b) Is lower the closer you get to the equator South America
(c) Is lower in the northern hemisphere that in the southern hemisphere
(d) Is highest above the Arctic circle
(e) Is unrelated to latitude
Explanation / Answer
All these questions are quite amazing and Interesting . Let's start Answering them .
1) (b) The GDP Per Capita is lower the closer you get to the euator South America
There are several theories which relates economic prosperity with geographical location. However this may not be always correct but in some cases as you move towards the equator GDP per capita decreases.
2) The Output is currently about 600 . We can calculate this by putting the values in Douglas formula
Output = 10 × (400^0.3) × ( 60^0.3 ) × ( 210 ^0.2 ) which comes around 600.
3) (b) Industrial nations would invest in less developed nation because the Human Capital of Less Developed nation would also be same as the Industrial Nations. So their return on investments would increase .
4) ( e ) None of the above , because in all the above options Human Capital is like Physical Capital.
I hope you unsrstood this Answer . Do ask if any Doubts .
Best Of Luck ! Keep Chegging !
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