Consider a Firm That Produces Output Using Labor and Capital

question 34

Multiple Choice

Consider a firm that produces output using labor and capital. The firm's stock of capital is fixed and in order to increase output, it must employ more workers. Which of the following occurs as the number of workers increases?

• A) Output per worker rises.
• B) Capital per worker falls.
• C) Wage per worker falls.
• D) Total output increases exponentially.

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Definitions:

Asian Carp

A term collectively referring to fish species native to Asia such as bighead, silver, grass, and black carp, some of which are considered invasive in other parts of the world.

Kudzu Vine

An invasive climbing plant native to Asia, known for its rapid growth and ability to cover and choke out other vegetation.

Formosan Termites

A species of termite known for causing significant structural damage due to its aggressive wood-consuming habits.

Asian Carp

A group of fish species native to Asia, some of which are considered invasive in other parts of the world.