-Refer to Exhibit 17-2.Assume that the starting point is always point 1.Which of the production function graphs shown,(a)or (b),represents an increase in the quantity of labor,and which represents an increase in the technology coefficient,respectively?
A) (a); (b)
B) (b); (a)
C) (a); (a)
D) (b); (b)

Question

-Refer to Exhibit 17-2.Assume that the starting point is always point 1.Which of the production function graphs shown,(a)or (b),represents an increase in the quantity of labor,and which represents an increase in the technology coefficient,respectively?
A) (a); (b) 
B) (b); (a) 
C) (a); (a) 
D) (b); (b)

Quizplus · Accepted Answer

Option (a) represents an increase in the quantity of labor, as the production function shifts upward when more labor is added. Option (b) represents an increase in the technology coefficient, as the slope of the production function becomes steeper indicating that the same quantity of inputs can produce more output due to improved technology.