Use the following graph to answer the next two questions.

-What would cause an upward shift of the production function?
A) an increase in capital
B) an increase in investment
C) an increase in output
D) an increase in depreciation
E) an advance in technology

Question

Use the following graph to answer the next two questions.
 
-What would cause an upward shift of the production function?
A) an increase in capital 
B) an increase in investment 
C) an increase in output 
D) an increase in depreciation 
E) an advance in technology

Quizplus · Accepted Answer

An advance in technology would shift the production function upward by increasing productivity and efficiency, allowing more output to be produced with the same level of inputs. Increases in capital, investment, and output would lead to movement along the production function, rather than a shift. Increases in depreciation would actually decrease the level of output that could be produced with the same level of inputs.

Use the Following Graph to Answer the Next Two Questions