If a Neutral Technological Advance Improves the Production Function, the Neoclassical

question 87

Multiple Choice

If a neutral technological advance improves the production function, the neoclassical theory of distribution predicts:

• A) the real wage will rise and the real rental price of capital will fall.
• B) both the real wage and the real rental price of capital will fall.
• C) both the real wage and the real rental price of capital will rise.
• D) the real wage will fall and the real rental price of capital will rise.

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Definitions:

Competition

A biological interaction where individuals or species vie for the same resources, such as food or space, in an ecosystem.

Predation

The biological interaction where one organism, the predator, hunts and consumes another organism, the prey, as a means of obtaining energy and nutrients.

Commensalism

Commensalism is a type of symbiotic relationship between two living organisms where one benefits without harming or benefiting the other.

Interspecific Competition

A biological interaction between organisms of different species competing for the same resources in an ecosystem, such as food or space.