Assume the Production Function Is Represented by Y = F

question 3

Multiple Choice

Assume the production function is represented by Y = F (K, AN) and the number of workers is constant. Now suppose the state of technology variable, A, increases by 6%. This implies that which of the following variables will also increase by 6%?

• A) Effective labour.
• B) Capital.
• C) Output.
• D) All of the above.
• E) None of the above.

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