A Decrease in the Capital-Labor Ratio Would Result In

question 74

Multiple Choice

A decrease in the capital-labor ratio would result in:

• A)higher labor productivity because labor does more work.
• B)lower labor productivity because labor is working with relatively less capital.
• C)higher labor productivity because labor is producing less capital and more of other goods.
• D)lower labor productivity because more capital is available.
• E)higher labor productivity because more capital is available.

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Definitions:

Human Capital

The skills, knowledge, and experience possessed by an individual viewed in terms of their value or cost to an organization or country.

Compensating Differential

The difference in wages that compensates workers for undesirable aspects of a job, such as long hours or dangerous conditions.

Human Capital

The qualifications, know-how, and lived experiences of a person or society, assessed in terms of their profitability or cost to a business or country.

Compensating Differential

The additional amount of income that a worker requires to accept a job with undesirable features, compared to a similar job with more favorable features.