What Happens When Technological Advance Makes Available a New Highly

question 154

Multiple Choice

What happens when technological advance makes available a new highly productive capital good for which MP/P is greater than that of labor for which it is a substitute resource?

• A) Labor will replace the new capital because labor is now cheaper.
• B) The new capital will replace labor because it reduces the firms' costs.
• C) More of both the new capital and labor will be used because firms are more productive.
• D) Less of both the new capital and labor will be used because the firms do not know how to use the new technology.

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Definitions:

Premium Parking Spaces

Reserved parking areas situated in desirable locations that are typically offered as a privilege to certain individuals or available for an additional fee.

Profit Sharing

A company policy of sharing a portion of its profits with its employees, typically in the form of bonuses or contributions to retirement accounts.

Track Results

Involves monitoring, recording, and analyzing outcomes or performance over a period to measure progress towards goals.

Extrinsic Rewards

Benefits or compensations given by an external party, such as money or awards, that motivate individuals to perform certain tasks.