Labor-Augmenting Technology Causes Which of the Following? (I) the Marginal Productivity

question 167

Multiple Choice

Labor-augmenting technology causes which of the following? (i) The marginal productivity of labor increases.
(ii) The marginal productivity of labor decreases.
(iii) Labor demand shifts to the right.
(iv) Labor demand shifts to the left.

• A)(i) only
• B)(ii) only
• C)(i) and (iii)
• D)(ii) and (iv)

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Definitions:

Equity-Financed

A method of funding a company's operations by issuing shares to investors, rather than taking on debt.

Incremental Value

The additional value generated by undertaking a specific action or investment compared to not doing so.

Shares Outstanding

The total number of shares of a company's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares.

Equity-Financed

A method of funding a company’s operations by issuing shares of stock to investors rather than borrowing money.