A technological advance will shift (1)TP, AP, and MP curves up.
(2)TP, AP, and MP down.
(3)TC, ATC, and MC curves up.
(4)TC, ATC, and MC curves down.
A)(1)and (3)
B)(1)and (4)
C)(2)and (3)
D)(2)and (4)
E)none of the above

Question

Quizplus · Accepted Answer

A technological advance will lower the cost of production, leading to a shift down in the total cost (TC), average total cost (ATC), and marginal cost (MC) curves. This will also increase the level of output that can be produced with the same inputs, shifting up the total product (TP), average product (AP), and marginal product (MP) curves. Therefore, choices (1) and (3) are incorrect, while choices (2) and (4) are partially correct. The correct answer is B, which states that both the TC, ATC, and MC curves will shift down, while the TP, AP, and MP curves will shift up.

A Technological Advance Will Shift (1)TP, AP, and MP Curves