Question: Production function shows the relationship between output and input. Suppose an economy's production function is specified by Y = ALK, where Y is GDP, A

Production function shows the relationship between output and input. Suppose an economy's production function is specified by Y = ALK, where Y is GDP, A represents the state of technology which is equal to 100, K is the physical capital which is equal to 81 and L is the quantity of labor.

a) Plot the levels of output associated with 1, 2, 4 and 6 labor units and label this production function PF.

b) Show graphically and explain on the same x and y axis what happens to this production function if there is political instability in the country.

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