Over a Five-Year Span,the ABC Co

question 91

Multiple Choice

Over a five-year span,the ABC Co.reduced the amount of labor it hired.At the same time,the marginal productivity of labor increased.Which of the following COULD explain this observation?

• A) the law of diminishing marginal returns
• B) labor saving technical change
• C) organizational innovation
• D) All of the above.

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Definitions:

Capital Intensity Ratio

A measure of a company's investment in physical assets relative to its labor force, indicating the extent to which a firm's operations are automated or labor-intensive.

Operating Capacity

The maximum output that a business can produce in a given period under normal conditions, influenced by its resources and operational constraints.

Notes Payable

Short-term or long-term liabilities in the form of written promises to pay a specified amount with interest by a certain date.

Fixed Assets/Sales Ratio

A financial metric that indicates how efficiently a company is using its fixed assets to generate sales.