If production function q1 = f(L, K), which of the following production functions illustrates neutral technical progress?
A)q2 = f(1.25L, 1.25K)
B)q2 = f(1.25L, K)
C)q2 = f(L, 1.25K)
D)q2 = 1.25 ∗ f(L, K)

Question

Quizplus · Accepted Answer

In a neutral technical progress environment, both the input factors increase in the same proportion, resulting in a proportional increase in output. Hence, the correct choice is q2 = 1.25*f(L, K), where both L and K are increased by 25%.

If Production Function Q1 = F(L, K), Which of the Following