If the Productivity of Farmers Has Risen Substantially Over Time

question 110

Multiple Choice

If the productivity of farmers has risen substantially over time because of technological progress, and workers can move freely between being farmers and barbers, the neoclassical theory of distribution predicts that the real wage(s) of:

• A) both barbers and farmers should have remained constant over time.
• B) both barbers and farmers should have risen over time.
• C) farmers should have risen while the real wage of barbers should have remained constant.
• D) barbers should have risen while the real wage of farmers should have remained constant.

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Definitions:

Tradeoff

A situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.

Benefit

An advantage or profit gained from something.

Sensory Organs

Sensory organs are specialized parts of the body that receive and process sensory information, enabling perception of sight, sound, smell, taste, and touch.

High Frequency

Pertaining to or involving very short intervals of time or occurring at a rapid rate.