If the per-worker production function shifts down,
A)it now takes more capital per hour worked to get the same amount of real GDP per hour worked.
B)an economy can increase its real GDP per hour worked without changing the level of capital per hour worked.
C)the per-worker production function becomes steeper.
D)positive technological change has occurred in the economy.

Question

Quizplus · Accepted Answer

When the per-worker production function shifts down, it means that for any given level of capital per hour worked, less output is being produced. Therefore, in order to maintain the same level of GDP per hour worked, more capital per hour worked is required. This results in a decrease in the capital-to-output ratio and an increase in the cost of production.

If the Per-Worker Production Function Shifts Down