Figure 22-2
-Refer to Figure 22-2. Based on the per-worker production function above, if the economy raises capital per hour worked from $35,000 to $40,000, by how much will real GDP per hour worked increase?
A) $150
B) $1,850
C) $2,000
D) $5,000

Question

Figure 22-2 
-Refer to Figure 22-2. Based on the per-worker production function above, if the economy raises capital per hour worked from $35,000 to $40,000, by how much will real GDP per hour worked increase?
A) $150 
B) $1,850 
C) $2,000 
D) $5,000

Quizplus · Accepted Answer

The per-worker production function shows diminishing returns to capital. As capital per hour worked increases from $35,000 to $40,000, the increase in real GDP per hour worked is smaller than the increase in capital, suggesting a smaller increment like $150.

Figure 22-2 -Refer to Figure 22-2. Based on the Per-Worker Production Function