Production Function
Real GDP = T (L,K),such that Real GDP = T(L + K)
Assume that the technology coefficient is equal to 0.40.
-Refer to Exhibit 17-1.If this production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,the resulting graph would be
A) upward sloping.
B) downward sloping.
C) vertical.
D) horizontal.

Question

Quizplus · Accepted Answer

According to the production function, Real GDP (output) is a function of both labor and capital, and the technology coefficient is 0.40. If we graph this production function with labor on the horizontal axis and real GDP on the vertical axis, it would be upward sloping because the output increases as we add more labor and capital input.

Production Function Real GDP = T (L,K),such That Real GDP = T(L