-Refer to Exhibit 17-2

question 82

Multiple Choice

-Refer to Exhibit 17-2.Assume that the starting point is always point 1.Which of the production function graphs shown,(a) or (b) ,represents an increase in the quantity of labor,and which represents an increase in the quantity of capital,respectively?

• A) (a); (a)
• B) (b); (a)
• C) (a); (b)
• D) (b); (b)

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Definitions:

Consumption Bundle

A set of goods or services that an individual considers purchasing, given their income and the prices of those goods/services.

Indifference Curves

Graphs representing different combinations of goods that give a consumer equal levels of satisfaction, thereby indicating their preferences.

Bundle

A combination of different goods or services that are sold together as a single package.

Indifference Curves

Graphical representations in microeconomics that show combinations of two goods among which a consumer is indifferent, meaning they have no preference for one combination over the other.