The Graphs Below Depict the Production Function and Labor Market

question 446

Multiple Choice

The graphs below depict the production function and labor market for an imaginary economy. The economy is, initially, at points x and X.
Figure 1 Figure 2
-An increase in labor productivity shifts the labor curve .

• A) supply; leftward
• B) demand; leftward
• C) supply; rightward
• D) demand; rightward

---

Definitions:

Barriers To Entry

Obstacles that prevent or hinder new competitors from easily entering an industry or area of business.

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for all possible adjustments, including changes in industry size.

Natural Monopoly

A market structure where a single firm can produce the entire market supply of a particular good or service at a lower cost than any potential competitor.

Network Effects

Network effects occur when the value of a product or service increases as more people use it, making it more attractive and beneficial to users.