Based on the production function in the above figure,which of the following is an attainable combination of labour and real GDP?
i.300 billion hours of labour and real GDP of $20 trillion
ii.300 billion hours of labour and real GDP of $8 trillion
iii.100 billion hours of labour and real GDP of $12 trillion

Question

Quizplus · Accepted Answer

The production function shows that there is a maximum output that can be produced with a given amount of labor. Any point below the production function is attainable, but any point above it is not. Therefore, option i with 300 billion hours of labor and real GDP of $20 trillion is above the production function and is not attainable. Option iii with 100 billion hours of labor and real GDP of $12 trillion is also above the production function and is not attainable. Option ii with 300 billion hours of labor and real GDP of $8 trillion is below the production function and therefore is attainable.

Based on the Production Function in the Above Figure,which of the Following