Question 17

Refer to ECON Graph.jpg, to answer the following question. Explanation is required.

Question

The figure shows the impact of technological change on the per-worker production function. Use the figure ECON Graph.png to help determine which one of the following statements is true.

a) The graph shows that with $50,000 in capital per hour worked, Production Function3 produces the most real GDP per hour worked

b) The graph shows that with $50,000 in capital per hour worked, Production Function2 produces the most real GDP per hour worked.

c) The graph shows that with $50,000 in capital per hour worked, Production Function4 produces the most GDP per hour worked.

d) The graph shows that with $50,000 in capital per hour worked, production function1 produces the most real GDP per hour worked.

Technological Change Increases Output per Hour Worked O O Production Real GDP per hour worked, YL 5875mmmmmin function Product function 775...... Production function 875.4. Production function Technological change causes the per - worker production fine function to shill up $50,000 Capital per hour worked, K/L