If the slope of the per-worker production function is 1/2 in a given range, how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?
A)Real GDP per hour worked will increase by $5,000.
B)Real GDP per hour worked will increase by $20,000.
C)Real GDP per hour worked will increase by $10,000.
D)Real GDP per hour worked will decrease by $20,000.
E)Real GDP per hour worked will increase by more than $20,000.

Question

Quizplus · Accepted Answer

Since the slope of the per-worker production function is 1/2, a $10,000 increase in capital per hour worked will result in a $5,000 increase in real GDP per hour worked, as the slope represents the change in output (real GDP per hour worked) for a given change in input (capital per hour worked).

If the Slope of the Per-Worker Production Function Is 1/2