Question: ( 2 4 ) d ) Unfortunately, a strong earthquake ( 5 . 9 on the Richter scale ) destroyed 2 5 % of Arcadia's
d Unfortunately, a strong earthquake on the Richter scale destroyed of Arcadia's capital. However, thanks to the very strict construction laws in the country, the population was not harmed, and the labour force remained unchanged at Assume again that
i What is the new total output level in Arcadia? By how much has it changed? Calculate. Round off to the nearest whole number.
Explain the change in words ie is it higher or lower than the initial value, and why? Draw a graph of the production function with on the horizontal axis to illustrate the change. Show your work.
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