Suppose the Price of Capital and Labour Remain Constant but That

question 162

Multiple Choice

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

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

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Definitions:

Uncut Forest

An area of forest that has not been subjected to logging, retaining its natural characteristics and biodiversity.

Regenerated Forest

Forests that have re-grown after a major disturbance, such as logging, fires, or clear-cutting, often with the intervention of human or natural processes.

Wilderness

A natural environment on Earth that has not been significantly modified by human activity, offering critical habitat for wildlife and opportunities for human recreation.

Clear-cutting Methods

Forestry practices involving the complete removal of all trees from a particular area, often used for timber extraction.