Suppose Technological Improvements Reduced the Cost of Producing Automobiles by 50

question 13

Multiple Choice

Suppose technological improvements reduced the cost of producing automobiles by 50 percent, causing the price of automobiles to decline by a similar amount. Which of the following would necessarily result from this development?

• A) Employment in the automobile industry would decrease.
• B) Real income would increase.
• C) Real income would decrease.
• D) Both a and c are correct.

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Definitions:

Administrator

An administrator is an individual or entity responsible for managing or overseeing the operations and tasks of an organization or estate, often in a legal or business context.

PepsiCo

A multinational food, snack, and beverage corporation that operates globally, known for products like Pepsi, Lays, and Gatorade.

PepsiCo

A global food and beverage leader with a product portfolio including 22 brands that generate more than $1 billion each in annual retail sales.

Devise

To plan or invent a complex process, system, or mechanism through careful thought.