The relationship between output per worker and capital per work exhibits
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- Capital per worker (K/L): This is the amount of capital (machines, equipment, etc.) available per worker, typically measured in units of capital per worker. Show more…
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Use a simple production function model to explain the relationship between capital per worker and output per worker.
Crystal W.
If the per-worker production function were shaped as shown in the following graph, what would be the implications for economic growth of a country that was accumulating increasing quantities of capital per hour worked? Briefly explain.
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This graph contains three per-worker production functions: pwpf1, pwpf2, and pwpf3. The x-axis is labeled “Capital per hour worked, K/L” and the y-axis is labeled “Real GDP per hour worked, Y/L.” All three per-worker production functions begin at the origin where the x- and y-axes meet. All three per-worker production functions have the same curve, where they start out steep and plateau as they move to the right. Pwpf1 plateaus lower than pwpf2, and pwpf2 plateaus lower than pwpf3. There are 4 points, A-D, that are labeled on these per-worker production functions. Point A is on pwpf2. A vertical dashed line run from Point A to the x-axis, where the label (K/L)1 is marked. Points B, C, and D are on pwpf1, pwpf2, and pwpf3, respectively, and all three line up vertically with one another. A vertical dashed line runs through Points B, C, and D and goes down to the x-axis, where it’s labeled (K/L)2. Points A and B line up horizontally with one another. A horizontal dashed line runs through Points A and B over to the y-axis; this line is labeled (Y/L)1. A second horizontal dashed line runs from Point C over to the y-axis and is labeled (Y/L)2. A third horizontal dashed line runs from Point D over to the y-axis and is labeled (Y/L)3. Holding all else constant, a movement from A to C can be explained by: Group of answer choices An increase in capital A negative technological change An increase in labor A positive technological change
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