Suppose the production function for a certain device is q = L + K.If neutral technical change has occurred,which of the following could be the new production function?
A) q = L + 5K
B) q = 5 ∗ (L + K)
C) q = 5L + K
D) All of the above are possible.

Question

Quizplus · Accepted Answer

Neutral technical change refers to a change that affects all inputs in the same proportion, maintaining the ratio of inputs used in production. Option B, q = 5 * (L + K), represents a proportional increase in output from both inputs (labor, L, and capital, K), consistent with neutral technical change.

Suppose the Production Function for a Certain Device Is Q