Figure 7.4 Alt text for Figure 7.4: In figure 7.4, a graph representing per-worker production functions.
Long description for Figure 7.4: The x-axis is labelled, capital per hour worked, K/L.The y-axis is labelled, real GDP per hour worked, Y/L.3 concave curves originating from 0 at the vertex are shown.5 points A ($50000, $15000), B ($60000, $16000), C ($70000, $16400), D ($60000, $17000), and E ($60000, $15000)are plotted.The curve labelled, Production function 1, passes through point E.The curve labelled, Production function 2, passes through points A, B, and C.The curve labelled, Production function 3, passes through point D.These 5 points are connected to their respective coordinates on the x-axis and y-axis with dotted lines.
-Refer to Figure 7.4.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)E to B to D.
C)C to B to A.
D)D to B to E.
E)D to A.

Question

Figure 7.4  Alt text for Figure 7.4: In figure 7.4, a graph representing per-worker production functions.
Long description for Figure 7.4: The x-axis is labelled, capital per hour worked, K/L.The y-axis is labelled, real GDP per hour worked, Y/L.3 concave curves originating from 0 at the vertex are shown.5 points A ($50000, $15000), B ($60000, $16000), C ($70000, $16400), D ($60000, $17000), and E ($60000, $15000)are plotted.The curve labelled, Production function 1, passes through point E.The curve labelled, Production function 2, passes through points A, B, and C.The curve labelled, Production function 3, passes through point D.These 5 points are connected to their respective coordinates on the x-axis and y-axis with dotted lines.
-Refer to Figure 7.4.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)E to B to D. 
C)C to B to A. 
D)D to B to E. 
E)D to A.

Quizplus · Accepted Answer

The per-worker production function in the graph shows that the largest changes in an economy's standard of living would be achieved by a movement from point E to point B and then to point D. This is because this path follows the steepest part of Production Function 2, which has the highest output per hour worked at these points. This movement represents an increase in capital per hour worked (K/L), which leads to an increase in real GDP per hour worked (Y/L). Therefore, choice B is the best option for achieving the largest changes in an economy's standard of living.

Figure 74 Alt Text for Figure 7