Figure 7.1 Alt text for Figure 7.1: In figure 7.1, a graph comparing capital per hour worked and real GDP per hour worked.
Long description for Figure 7.1: The x-axis is labelled, capital per hour worked, K/L, with values 40,000 and 60,000 marked.The y-axis is labelled, real GDP per hour worked, Y/L, with 0 at the vertex.3 concave curves, each originating from the vertex are shown.4 points A, B, C, and D are plotted such that point A has 40,000 as the x coordinate, and points B, C, and D have 60,000 as the x coordinate.The 3 curves pass through these points.The curve labelled, Production function 1, passes through point B.The curve labelled, Production function 2, passes through points A and C.The curve labelled, Production function 3, passes through point D.
-Refer to Figure 7.1.Using the per-worker production function in the figure above, the largest changes in an economy's standard of living would be achieved by a movement from
A)A to B to C.
B)B to C to D.
C)C to B to A.
D)D to C to B.
E)C to D to A.

Question

Figure 7.1  Alt text for Figure 7.1: In figure 7.1, a graph comparing capital per hour worked and real GDP per hour worked.
Long description for Figure 7.1: The x-axis is labelled, capital per hour worked, K/L, with values 40,000 and 60,000 marked.The y-axis is labelled, real GDP per hour worked, Y/L, with 0 at the vertex.3 concave curves, each originating from the vertex are shown.4 points A, B, C, and D are plotted such that point A has 40,000 as the x coordinate, and points B, C, and D have 60,000 as the x coordinate.The 3 curves pass through these points.The curve labelled, Production function 1, passes through point B.The curve labelled, Production function 2, passes through points A and C.The curve labelled, Production function 3, passes through point D.
-Refer to Figure 7.1.Using the per-worker production function in the figure above, the largest changes in an economy's standard of living would be achieved by a movement from
A)A to B to C. 
B)B to C to D. 
C)C to B to A. 
D)D to C to B. 
E)C to D to A.

Quizplus · Accepted Answer

Moving from point B to point C would result in the greatest increase in real GDP per hour worked, as it represents a movement along Production Function 1, which has the steepest slope. Moving from point C to point D would result in the greatest increase in capital per hour worked, which would further increase real GDP per hour worked as it moves along Production Function 3. Therefore, the best choice would be to move from B to C to D, as this would result in the largest changes in an economy's standard of living.

Figure 71 Alt Text for Figure 7