Figure 74 Alt Text for Figure 7

question 115

Multiple Choice

Figure 7.4 Alt text for Figure 7.4: In figure 7.4, a graph representing per-worker production functions.
Long description for Figure 7.4: The x-axis is labelled, capital per hour worked, K/L.The y-axis is labelled, real GDP per hour worked, Y/L.3 concave curves originating from 0 at the vertex are shown.5 points A ($50000, $15000) , B ($60000, $16000) , C ($70000, $16400) , D ($60000, $17000) , and E ($60000, $15000) are plotted.The curve labelled, Production function 1, passes through point E.The curve labelled, Production function 2, passes through points A, B, and C.The curve labelled, Production function 3, passes through point D.These 5 points are connected to their respective coordinates on the x-axis and y-axis with dotted lines.
-Refer to Figure 7.4.The movement from E to B to D in the figure above illustrates

• A)an improvement in technology.
• B)a decline in capital per worker.
• C)diminishing returns to capital.
• D)diminishing returns to labour.
• E)an increase in the price level.

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Definitions:

Labor-Hour

A labor-hour represents an hour of work performed by an employee, typically used as a basis for allocating labor costs or measuring productivity.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including but not limited to utilities, maintenance, and factory equipment depreciation.

Underapplied

A situation in cost accounting where the allocated or applied costs are less than the actual costs incurred.

Overapplied

Overapplied refers to the situation where the amount of overhead allocated to products is more than the actual overhead incurred.