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,and capital rises from 4 units to 6 units it would cause a
A) shift upward in the production function to a higher level of Real GDP.
B) shift downward in the production function to a lower level of Real GDP.
C) movement down along the same production function to a lower level of Real GDP.
D) movement up along the same production function to a higher level of Real GDP.
Correct Answer:
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