Suppose the production function Q = T (L, K) is graphed with quantity of labor on the X-axis and quantity of output on the Y-axis. If there is a decrease in technology,

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When analyzing how a change in technology affects the production function Q = T(L, K) graphed with labor on the x-axis and output on the y-axis, we must consider what technology does to output levels for any given input mix.
Option 1: 'it is a movement downwards along the curve.' A movement along the curve would imply that technology remains unchanged and we are simply changing the quantity of labor along the existing production function. Since technology changes the function itself, this option describes a partial shift, not a pure movement along the same curve. Therefore, it is not correct.
Option 2: 'it is a movement upwards along the curve.' Similar to option 1, a movement along the curve would require no change in the production function’s technology. An alteration in technology changes the entire relation between inputs and output, not just position along the same curve. Hence this option is also incorrect.
Option 3: 'it is a shift of the curve downwards.' A decrease in technology reduces the maximum output possible for any given L and K, so the entire production function moves to a lower level of output. This is precisely described as a downward shift of the curve on the Q vs L (or Q vs K) graph.
Option 4: 'it is a shift of the curve upwards.' An improvement in technology would raise output for the same inputs, causing an upward shift. Since the scenario specifies a decrease in technology, this upward shift would be the opposite of what occurs, making this option incorrect.
Thus, the reasoning indicates that the correct characterization is a downward shift of the curve, reflecting lower productivity for all input combinations when technology declines.

Princip of Econ-Macroeconomics Chapter 17 Homework

Suppose the production function Q = T (L, K) is graphed with quantity of labor on the X-axis and quantity of output on the Y-axis. If there is a decrease in technology,

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