Figure 12-1
-Refer to Figure 12-1.Which of the following could explain why the total product curve would shift from TP1 to TP2?
A) There is less capital equipment available to the firm.
B) Labor skills have become rusty and outdated in the firm.
C) The firm has developed improved production technology.
D) The firm is now receiving a higher price for its product.

Question

Figure 12-1 
-Refer to Figure 12-1.Which of the following could explain why the total product curve would shift from TP1 to TP2?
A) There is less capital equipment available to the firm. 
B) Labor skills have become rusty and outdated in the firm. 
C) The firm has developed improved production technology. 
D) The firm is now receiving a higher price for its product.

Quizplus · Accepted Answer

The shift from TP1 to TP2 indicates an increase in total output at every level of input. This could be caused by the firm adopting an improved production technology, which allows them to produce more with the same amount of inputs. A decrease in capital equipment or rusty labor skills would likely shift the curve downwards, while a higher price for the product could lead to a movement along the same curve rather than a shift to a new curve.

Figure 12-1 -Refer to Figure 12-1.Which of the Following Could Explain Why