a. A technological breakthrough raises a country's total factor productivity A by 10%. Show how this change affects the graphs of both the production function relating output to capital and the production function relating output to labour.
b. Show that a 10% increase in A also increases the MPK and the MPN by 10% at any level of capital and labour. (What happens to ∆K for any increase in capital ∆K or for any increase in labour ∆N?)
c. Can a beneficial supply shock leave the MPK and MPN unaffected? Show graphically.