Which Scenario Below Most Accurately Describes the Process by Which

question 119

Multiple Choice

Which scenario below most accurately describes the process by which a technological change can affect employment patterns across industries?

• A) A technological advance makes it possible to produce more of good X with less labor.As a result,labor is released from producing good X.Some of this labor ends up producing goods Y and Z.
• B) A technological advance makes it possible to produce less of good X with less labor.As a result,labor is released from producing good X.Some of this labor ends up producing good Y.
• C) A technological advance makes it possible to produce more of good X with more labor.As a result,more labor is needed to produce good X.There is less labor available to produce goods Y and Z.
• D) A technological advance makes it possible to produce more of good X with less labor.As a result,labor becomes more important to the production of good X.More labor ends up producing good X.
• E) none of the above

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Definitions:

Residual Income

The amount of income that an individual or business has after all expenses and debts have been paid.

Return on Investment

A financial metric used to gauge the profitability of an investment, calculated by dividing the profit gained from an investment by the cost of the investment.

Operating Income

EBIT, which stands for Earnings Before Interest and Taxes, indicates a firm's profit derived specifically from its primary business activities.

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales revenue; calculated as sales divided by the investment in assets.