Assume That a Country's Production Function Changes From $Y = 2 \sqrt { K }$

question 67

Multiple Choice

Assume that a country's production function changes from $Y = 2 \sqrt { K }$ to $Y = 3 \sqrt { K }$
. Which of the following events could explain the change in this production function?

• A) the disappearance of diminishing returns from the production function
• B) the development of new technology in production
• C) greater capital accumulation
• D) less depreciation due to better capital stock maintenance.

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Definitions:

System 2

A term often associated with dual-process theories of mind, representing the analytical, deliberate, and logical mode of thinking.

Framing Effects

Cognitive biases where people's decisions are influenced by the way information is presented, rather than just the information itself.

Anchoring

Anchoring is a psychological phenomenon wherein an individual relies too heavily on an initial piece of information, or 'anchor,' to make subsequent decisions.

Heuristics

Simple, efficient rules, either hard-coded by evolutionary processes or learned, which help in making decisions, forming judgments, or solving problems.