An Appliance Manufacturer Adopts a New Technology That,ceteris Paribus,increases the Productivity

question 98

Multiple Choice

An appliance manufacturer adopts a new technology that,ceteris paribus,increases the productivity of capital.At the same time,its employees unionize and demand higher wages.Assume that for this manufacturer capital and labor are substitutable.Which of the following is most likely to occur?

• A) Capital will be substituted for labor.
• B) Labor will be substituted for capital.
• C) Output increases as do the prices of capital and labor.
• D) Output decreases as does the price of cars.

Understand how new scientific knowledge contributes to technological advances and its sources.

Grasp the concepts of product and process innovation and their implications for firms and consumers.

Understand how a consumer’s utility maximization affects the adoption of new products.

Learn about the sources of R&D funding and the significance of retained earnings for large corporations.

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Definitions:

Commodified

The process by which products or services are turned into commodities available for purchase in the market, affecting cultural artifacts and human labor.

NFL Draft

An annual event in which the National Football League (NFL) teams select eligible college football players to add to their rosters, serving as a primary source for teams to replenish their rosters.

Labour Force

The total number of people available for work, including both the employed and the unemployed.

Gender Stratification

The unequal distribution of wealth, power, and privilege across genders within a society.