If Labor and Capital Are Complementary in Production and a Technological

question 38

Multiple Choice

If labor and capital are complementary in production and a technological advance increases the productivity of capital, then, ceteris paribus,

• A) labor productivity is likely to fall.
• B) labor productivity is likely to rise.
• C) wages are likely to fall.
• D) Both A and C are correct.

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Definitions:

Act Ethically

The practice of making decisions and taking actions in accordance with moral principles and ethical standards.

Business

Commercial, professional, or industrial activities conducted by individuals or organizations to earn a profit or achieve other goals.

Benefit

An advantage or profit gained from something, often used in the context of employment, services, or products.

Politeness

The behavior that is respectful and considerate of other people's feelings.