Let a Firm's Production Function Be $Q = 100 ( a L + b K )$

question 46

Multiple Choice

Let a firm's production function be $Q = 100 ( a L + b K )$ The production function then becomes $Q = 500 ( a L + b K )$ Which of the following statements is true?

• A) Neutral technological progress has occurred.
• B) Labor-saving technological progress has occurred
• C) Capital-saving technological progress has occurred.
• D) Economies of scale have increased.

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Definitions:

Bureau Of Labor Statistics

A U.S. government agency responsible for collecting and reporting labor market activity, working conditions, and price changes in the economy.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

Weekly

Pertains to something that occurs, is done or calculated every week.

Basket Of Goods

A fixed set of consumer products and services valued on a regular basis for measuring inflation in an economy or specific market.