Assume That Labor Is Measured Along the Horizontal Axis and Capital

question 44

Multiple Choice

Assume that labor is measured along the horizontal axis and capital is measured along the vertical axis. If the $MR T S_{L ,K}$ =
decreases as we move inward toward the origin along the ray (slope of the isoquant becomes flatter) , we are observing

• A) neutral technological progress.
• B) labor-saving technological progress.
• C) capital-saving technological progress.
• D) both labor-saving and capital-saving technological progress.

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Definitions:

Straight-Line Method

The straight-line method is a depreciation technique that allocates an equal portion of the cost of an asset to each accounting period over its useful life.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds over a period of time.

Adjusting Entry

An accounting procedure for updating the records of unrecorded expenses or revenues to ensure accurate financial statements.

Straight-Line Amortization

A method of evenly distributing the cost of an intangible asset over its useful life.