If there is a change in the ability of a firm to produce a given level of output with a given level of inputs,we say there is
A)human capital investment.
B)technological change.
C)an increase in labor productivity.
D)a movement along a given per-worker production function.

Question

Quizplus · Accepted Answer

A change in a firm's ability to produce output with given inputs reflects a change in the production technology or process. This is referred to as technological change since it involves the development of new and improved methods of production or the adoption of more efficient techniques. Human capital investment involves enhancing the skills and knowledge of the workforce, while an increase in labor productivity implies a higher output per worker, holding other inputs constant. A movement along a per-worker production function reflects a change in the level of a single input, usually labor, while holding other factors constant.

If There Is a Change in the Ability of a Firm