(Figure: Increased Production) Figure: Increased Production Refer to the figure above. Which of the following factors could cause the upward shift of the production function from Y to Y'?
A) foreign direct investment
B) technological advancement
C) increase in the capital stock
D) an aging labor force

Question

(Figure: Increased Production) Figure: Increased Production  Refer to the figure above. Which of the following factors could cause the upward shift of the production function from Y to Y'?
A) foreign direct investment 
B) technological advancement 
C) increase in the capital stock 
D) an aging labor force

Quizplus · Accepted Answer

Technological advancement can cause an upward shift of the production function, as it allows for more output to be produced with the same inputs or for the same amount of output to be produced with fewer inputs. Foreign direct investment and an aging labor force are not directly related to the production function, and an increase in the capital stock would cause a movement along the production function rather than a shift.

(Figure: Increased Production) Figure: Increased Production Refer to the Figure