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coleshear coleshear
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A year ago
Scenario: Tree Country has a population of 18,000 people, of whom two-thirds are part of the workforce. The country's only asset is wood, where K = 18,000. The country only produces wooden furniture. In the figure below, Y stands for GDP, and H equals efficiency units of labor.




Refer to the scenario above. Assume Tree Country's economy has constant returns to scale. If its population doubles and all other inputs remain the same, how would GDP change?

▸ GDP would increase by exactly 50 percent.

▸ GDP would stay the same.

▸ GDP would increase.

▸ GDP would decrease by exactly 50 percent.
Textbook 
Macroeconomics

Macroeconomics


Edition: 3rd
Authors:
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shalashashalasha
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A year ago
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coleshear Author
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A year ago
Thanks for your help!!
Starfiew
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Brilliant ツ
SUmmerPeople
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You make an excellent tutor!
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