Suppose the production function takes the following form:

\[ Y = f(K, H) \]

where $ Y $ is output per worker, $ K $ is physical capital per worker, and $ H $ is human capital per worker.

Which of the following is true regarding the production function above?

A. Given human capital, increases in physical capital will run into decreasing returns.
B. Both physical capital per worker and human capital per worker have a positive impact on output per worker.
C. Given physical capital, increases in human capital will run into decreasing returns.
D. All of the above are true.

In the given production function, output per worker (Y) is determined by physical capital per worker (K) and human capital per worker (H). The correct statement is B because both physical capital and human capital have a positive impact on output per worker.

Increasing physical capital (K) per worker typically leads to increased productivity and output, and similarly, increasing human capital (H) per worker, which represents the knowledge and skills of the workforce, also contributes to higher output. Therefore, both physical and human capital positively affect output per worker.

Option A is incorrect because there is no information in the given production function that suggests that increases in physical capital would result in decreasing returns. Similarly, option C is also incorrect as there is no evidence to support the claim that increasing human capital would lead to diminishing returns.

Option D, "All of the above are true," is incorrect because only option B accurately reflects the information provided in the production function.

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