If Technological Change in an Industry Results, at Given Relative

question 31

Multiple Choice

If technological change in an industry results, at given relative factor prices, in a reduction in the amount of both capital and labor used to produce a given amount of output, but the reduction in labor requirements is greater than the reduction in capital requirements, this technological change would be called __________ in nature.

• A) neutral
• B) labor-saving
• C) capital-saving
• D) both labor-saving and capital-saving

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Definitions:

Informational Returns

Tax documents used to report certain types of transactions to the IRS, including income, interest, dividends, but not directly tax-deductible amounts.

Straight-Line Method

A method of calculating depreciation for accounting purposes, allocating a uniform expense amount to each year of an asset's useful life.

Depreciated

A decrease in the value of an asset over time, often due to wear and tear or obsolescence, which can be used for tax deductions.

Primarily Personal Property

Items or assets that are mainly used for personal, non-business purposes, which may include vehicles, furniture, and electronics.