Suppose the Price of Capital and Labour Remain Constant but That

question 128

Multiple Choice

Suppose the price of capital and labour remain constant but that the average educational level of workers has increased and therefore, productivity of labour increases.This would lead a firm

• A)to adopt a more capital-intensive production technology.
• B)to adopt a more labour-intensive technology.
• C)to keep its output and production technology unchanged, but to use fewer units of labour.
• D)to use only labour to produce the product.

---

Definitions:

Applied Research

focuses on applying existing scientific knowledge to solve practical problems and develop new technologies or techniques.

Business R&D

Research and Development (R&D) activities undertaken by businesses to innovate and develop new products, services, or processes.

Innovation

The introduction of new ideas, products, or methods, often leading to enhancements in efficiency, productivity, or quality.

Basic Research

Research conducted to increase fundamental knowledge and understanding, without specific applications in mind.