Asked by Giovanni Magana on May 26, 2024
Verified
Ronald's Outboard Motor Manufacturing plant production function is 
Ronald is investigating a new outboard motor manufacturing technique. Ronald believes that if he adopts the new technique, his production function for outboard motors will become: 
Given that Ronald uses 4 units of machine hours, sketch his production function with the old technique and the new technique as he increases labor hours. With the new technique, do labor hours contribute more to production?
Production Function
An equation that describes the relationship between input factors (like labor and capital) and the output of goods or services.
Outboard Motor
A propulsion system for boats that includes an engine, gearbox, and propeller or jet drive, and is mounted externally at the stern (rear) of the vessel.
Machine Hours
A measure of the amount of time a machine is operated, often used for accounting, cost allocation, or operational planning.
- Assess the effects of technological progress on a company's capacity for production.
Verified Answer
SM
Siham MilitoMay 31, 2024
Final Answer : 
The slope of the new production function is steeper for all labor uses. This implies the marginal product of labor is higher for the new technique. This means that labor hours are contributing at a higher rate for the new technique.
The slope of the new production function is steeper for all labor uses. This implies the marginal product of labor is higher for the new technique. This means that labor hours are contributing at a higher rate for the new technique.
Learning Objectives
- Assess the effects of technological progress on a company's capacity for production.