Everything else equal, technological change will typically move the economy alon

Question

Everything else equal, technological change will typically

move the economy along a fixed production function, increasing both productivity and output

move the economy along a fixed production function, increasing output but lowering productivity

cause the production function to shift upward, increasing both output and productivity

cause the production function to shift upward, increasing output but lowering productivity

cause the production function to shift upward, increasing output but leaving productivity unchanged

move the economy along a fixed production function, increasing both productivity and output

move the economy along a fixed production function, increasing output but lowering productivity

cause the production function to shift upward, increasing both output and productivity

cause the production function to shift upward, increasing output but lowering productivity

cause the production function to shift upward, increasing output but leaving productivity unchanged

Explanation / Answer

Everything else equal, technological change will typically:

c. cause the production function to shift upward, increasing both output and productivity.

( A technological change is a change in the set of feasible production possibilities. An improvement in technology usually means that fewer or less costly inputs are needed, and output is produced using same amount of inputs.)

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