Final answer:
This question revolves around a production function where capital is fixed in the short run, illustrating how output depends on labor employed, demonstrated in examples like typists or lumberjacks. The equilibrium output calculation suggests a production level of Y = 3923 after investment changes.
Step-by-step explanation:
The question involves analyzing a production function where capital stock is fixed in the short run. In this context, the production function can be represented as Q = f[L, K] or simplified to Q = f[L] since K (capital) is constant. The equation represents the relationship between the amount of labor (L) employed and the output produced. The concept is highlighted with examples such as lumberjacks using a set number of saws or typists using a fixed number of personal computers. It's crucial to understand that in the short run, only labor can be adjusted to change the level of production while capital remains unchanged. Applying this to the provided information, to calculate the equilibrium output after an increase in investment, we set up a straightforward equation and solve for Y, which gives us Y = 3923 after adjusting for consumption and investment components.