Refer to the following figure when answering the following questions.
Figure 4.1: Production Function
-Consider Figure 4.1. The shape of this production function suggests that $\alpha$ in the production function is:
A) equal to one.
B) greater than one.
C) equal to zero.
D) less than one.
E) Not enough information is given.

Question

Refer to the following figure when answering the following questions.
Figure 4.1: Production Function 
-Consider Figure 4.1. The shape of this production function suggests that $\alpha$ in the production function  is:
A) equal to one. 
B) greater than one. 
C) equal to zero. 
D) less than one. 
E) Not enough information is given.

Quizplus · Accepted Answer

The slope of the production function represents the marginal product, and the diminishing marginal product is reflected in the concave shape of the production function. Therefore, the value of alpha must be less than one to account for decreasing marginal product.

Refer to the Following Figure When Answering the Following Questions α\alphaα

Refer to the Following Figure When Answering the Following Questions $\alpha$