1- What is a production function? What are some factors that can cause a nation’s
production function to shift over time? What do you have to know besides an economy’s
production function to know how much output the economy can produce?
A production function shows how much output can be produced with a given amount of
capital and labor. The production function can shift due to supply shocks, which affect
overall productivity. Examples include changes in energy supplies, technological
breakthroughs, and management practices. Besides knowing the production function, you
must also know the quantities of capital and labor the economy has.