Which of the following situations would cause the greatest increase in labor productivity?
A)The employment rate increases and capital remains the same.
B)The increase in the employment rate is greater than the increase in capital.
C)The increase in capital is greater than the increase in the employment rate.
D)The employment rate remains the same and capital decreases.

Question

Quizplus · Accepted Answer

Labor productivity is generally increased most significantly when the amount of capital per worker rises, meaning that each worker has more or better tools, equipment, or technology to work with, thus increasing the output per worker. Situation C, where the increase in capital is greater than the increase in the employment rate, directly leads to an increase in capital per worker, thereby boosting labor productivity more than the other options presented.

Which of the Following Situations Would Cause the Greatest Increase