Suppose the Price of Capital and Labor Remain Constant but That

question 164

Multiple Choice

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

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