If Capital Per Worker Increases, Labour Productivity

question 70

Multiple Choice

If capital per worker increases, labour productivity

• A)decreases for a given level of technology.
• B)increases because the level of technology increases.
• C)increases for a given level of technology.
• D)decreases because the level of technology decreases.
• E)does not change unless technology advances at the same time.

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Definitions:

Binding Price Floor

A binding price floor is a government-imposed limit on how low a price can be charged for a product or service, set above the equilibrium price, leading to potential surpluses.

Surplus

The excess of supply over demand in a market, resulting in lower prices.

Shortage

A situation in which demand for a product exceeds its supply in a market.

Price Floor

A government- or authority-imposed minimum price that can be charged for a particular good or service, intended to prevent prices from falling below a certain level.