Figure 8-4
-Refer to Figure 8-4. Which of the following could cause the production function to shift upward?

Question

Figure 8-4 
-Refer to Figure 8-4. Which of the following could cause the production function to shift upward?

Quizplus · Accepted Answer

An increase in the availability of natural resources would shift the production function upward as it would allow for greater output to be produced with the same inputs. Increases in labor or the real wage rate would not shift the production function upward, but rather increase the marginal product of labor at each level of output. An increase in the economy's average price level would not affect the production function, but rather result in a movement along the existing production function due to changes in input costs.

Figure 8-4 -Refer to Figure 8-4. Which of the Following Could Cause