An Increase in Total Factor Productivity

question 38

Multiple Choice

An increase in total factor productivity

• A) changes neither the slope nor the position of the production function.
• B) changes the slope but not the position of the production function.
• C) changes the position but not the slope of the production function.
• D) changes both the slope and the position of the production function.
• E) keeps the marginal product of labour constant.

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A condition in which resources are allocated in such a way that maximizes the net benefit to society, ensuring that goods and services are produced and distributed in the most cost-effective manner.