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:

Beliefs

Convictions or acceptance that certain things are true or real, often without direct evidence or proof.

Values

The principles or standards of behavior that are regarded as important and desirable in life by an individual or society.

Conscientiousness

A personality trait characterized by diligence, carefulness, and a desire to do a task well.

Big Five

A model describing human personality through five broad dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism.