**Refer to Figure 11-4.** 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 labor.*Note: This text references Figure 11-4, which may include a diagram illustrating economic concepts such as technology improvement, capital decline per worker, or diminishing returns. Please refer to the educational materials for the specific figure details.* **Figure 11-4 Explained**This graph illustrates the relationship between capital per hour worked (K/L) and real GDP per hour worked (Y/L) over three different production functions. Each curve represents a different level of technological advancement or productivity:1. **Axes:** - The horizontal axis represents the capital per hour worked (K/L), with values increasing from $0 to $70,000. - The vertical axis represents the real GDP per hour worked (Y/L), with values ranging from $15,000 to $17,000.2. **Production Functions:** - **Production Function₁:** The lowest curve, which represents the initial level of technology or productivity. At point E, with $60,000 capital per hour, the real GDP per hour is $15,000. - **Production Function₂:** The middle curve, indicating improved technology or efficiency over Production Function₁. At point B, with $60,000 capital per hour, the real GDP per hour increases to $16,000. - **Production Function₃:** The highest curve, illustrating the highest level of technology or productivity. At point D, with $70,000 capital per hour, the real GDP per hour reaches $17,000.3. **Points on the Curves:** - **Point A:** On Production Function₁ with capital per hour of $50,000, yielding a real GDP per hour of $15,000. - **Point B:** On Production Function₂ with capital per hour of $60,000, yielding a real GDP per hour of $16,000. - **Point C:** On Production Function₂ with capital per hour of $70,000, yielding a real GDP per hour of $16,400. - **Point D:** On Production Function₃ with capital per hour of $70,000, yielding a real GDP per hour of $17,000. - **Point E:** On Production Function₁ with capital per hour of $60,000, yielding a real GDP per hour of $15,000.The graph demonstrates that as more capital is available per hour worked, real GDP per hour worked increases, and higher production functions yield higher outputs for the same input levels, indicating the role of technological progress in economic growth.

The capital to labour ratio calculates the ratio of capital to labour. The capital-labour ratio…

Refer to Figure 11-4. 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 labor.

Refer to Figure 11-4. 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 labor.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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