What Happens When Technological Advance Makes Available a New Highly

question 178

Multiple Choice

What happens when technological advance makes available a new highly productive capital good for which MP/P is greater than that of labor for which it is a substitute resource?

• A)Labor will replace the new capital because labor is now cheaper.
• B)The new capital will replace labor because it reduces the firms' costs.
• C)More of both the new capital and labor will be used because firms are more productive.
• D)Less of both the new capital and labor will be used because the firms do not know how to use the new technology.

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Definitions:

Repeated Exposure

involves the process by which repeated encounters with a stimulus lead to an increased liking for or familiarity with that stimulus.

Fundamental Attribution Errors

The tendency to overemphasize personality-based explanations for behaviors observed in others while underemphasizing the role and power of situational influences.

Social Facilitation

Any positive or negative effect on performance that can be attributed to the presence of others, either as an audience or as coactors.

Mere-Exposure Effect

A psychological phenomenon where people tend to develop a preference for things merely because they are familiar with them.