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:

Icy Sidewalk

An icy sidewalk is a pavement covered in ice, often posing a hazard due to the increased risk of slipping and falling.

Foreseen Risk

A foreseen risk is a potential problem or hazard that has been identified or could be reasonably anticipated in advance, often highlighting the importance of planning or mitigation efforts.

Injury

Physical harm or damage to the body caused by an accident or event.

Walking

The act of moving at a moderate pace by placing one foot in front of the other, often for exercise or transportation.