Refer to Figure 6.1 for the following questions.
Figure 6.1

-The movement from A to E in Figure 6.1 illustrates:
A)negative technological change.
B)a decline in capital per worker.
C)zero returns to capital.
D)diminishing returns to labour.

Question

Refer to Figure 6.1 for the following questions.
Figure 6.1
 
-The movement from A to E in Figure 6.1 illustrates:
A)negative technological change. 
B)a decline in capital per worker. 
C)zero returns to capital. 
D)diminishing returns to labour.

Quizplus · Accepted Answer

Negative technological change occurs when the output per unit of capital decreases. In Figure 6.1, the movement from A to E represents a decrease in output per unit of capital, as the isoquant shifts downward.

Refer to Figure 6.1 for the Following Questions