Suppose the production function for a certain device is q = L + K. If a labor-saving technical change has occurred, which of the following could be the new production function?
A) q = L + 5K
B) q = 5 ? (L + K)
C) q = 5L + K
D) All of the above are possible.
A
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The St. Louis Federal Reserve Bank econometric model indicates that crowding out
A) is only partial. B) never occurs. C) occurs only in highly unusual circumstances. D) is complete.
An increase in the marginal rate of return on bread-mixing machines would
a. reduce the supply of loanable funds and reduce the equilibrium market interest rate b. reduce the supply of loanable funds and increase the equilibrium market interest rate c. increase the supply of loanable funds and reduce the equilibrium market interest rate d. increase the supply of loanable funds and increase the equilibrium market interest rate e. increase the demand for loanable funds and increase the equilibrium market interest rate