Assuming Pennsylvania were to legalize recreational marijuana and both of the above arguments become true (meaning people become less productive and businesses increase capital), construct a per-worker production function for this economy with two points labeled on it. Point A for before the legalization and point B for after and the effects listed above take place. Assume nothing else happens. Be sure to label both axes and your per-worker production function like we did earlier in the lesson

1. in detail what changes you made on your diagram above and why you made those changes. Also explain the outcome of these events related to the variables we see in this model.

1. Answer the following questions to the best of your ability.

1. What do we mean by diminishing marginal returns to capital per hour worked? How is this shown on our per-worker production function model?

2. What does it mean when we say physical capital is rivalrous?

Physical capital is tangible, man-made objects that a company buys or invests in to produce goods.

1. in detail what changes you made on your diagram above and why you made those changes. Also explain the outcome of these events related to the variables we see in this model.

1. Answer the following questions to the best of your ability.

1. What do we mean by diminishing marginal returns to capital per hour worked? How is this shown on our per-worker production function model?

2. What does it mean when we say physical capital is rivalrous?

Physical capital is tangible, man-made objects that a company buys or invests in to produce goods.