If the slope of the per-worker production function is 1/2 in a given range,how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?
A)Real GDP per hour worked will increase by $5,000.
B)Real GDP per hour worked will increase by $20,000.
C)Real GDP per hour worked will increase by $10,000.
D)Real GDP per hour worked will decrease by $20,000.

Question

Quizplus · Accepted Answer

The slope of the per-worker production function represents the change in output (real GDP per hour worked) for a given change in input (capital per hour worked). A slope of 1/2 means that for every 1 unit increase in capital, output increases by 1/2 unit. Therefore, a $10,000 increase in capital per hour worked would increase real GDP per hour worked by $5,000 (1/2 of $10,000).

If the Slope of the Per-Worker Production Function Is 1/2