Which of the following changes would shift the entire production function upward?

Question

BlackTom AI · Accepted Answer

Consider what each change does to the production function itself, not just to output given inputs.
Option 1: An increase in labor alone. In a standard production-function framework with technology held constant, more labor moves you up along the same production function rather than shifting the entire function upward. So this changes output for given capital and technology but does not raise the maximum output achievable with any input combination.
Option 2: An increase in capital alone. Similar to labor, adding capital while technology remains unchanged translates to a movement along the existing production function rather than a vertical shift. It increases output for some input mix but does not elevate the entire curve.
Option 3: A technological improvement. This alters the production technology itself, enabling a higher level of output for every combination of inputs. Graphically, the production function shifts upward (or outward) because the same inputs now produce more output than before, reflecting improved efficiency or productivity.
Option 4: A rise in wages. Wages affect the cost side and incentives but do not change the technical relationship between inputs and output encoded in the production function. Therefore, this does not shift the production function upward.

ECON_002_001_25F Problem Set 2

Which of the following changes would shift the entire production function upward?

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ECON_002_001_25F Problem Set 2

Which of the following changes would shift the entire production function upward?

查看解析

登录即可查看完整答案

类似问题

Use the following graph to answer the next question, where LRATC = long-run average total cost. What happens when a firm adopts a new technology?

What do you think would be the Cobb-Douglas single best prescription for poor countries to catch up with the rich?

From the Cobb-Douglas production function we learn that there are two sources that help explain cross-country differences in per capita income: ________ and ________.

A firm's production function shows

Refer to the following figure when answering the following questions. Figure 4.1: Production Function Consider Figure 4.1. For given and fixed ˉ L , the shape of this production function suggests that α in the production function Y=Kα ˉ L 1−α is ______.

A production function is a technological relationship between:

An economy's factors of production and its production function determine the economy's:

更多留学生实用工具

希望你的学习变得更简单

From the Cobb-Douglas production function we learn that there are two sources that help explain cross-country differences in per capita income: and .