When firms are able to increase the amount of physical capital available to workers, the
A)marginal product of labor will decrease.
B)value of the marginal product of labor will decrease.
C)value of the marginal product of labor will increase.
D)final product price will increase.

Question

Quizplus · Accepted Answer

Increasing the amount of physical capital available to workers will increase labor productivity and, therefore, the value of the marginal product of labor. This is because workers now have access to better tools and equipment that make their work more efficient and effective. This will lead to an increase in output without a commensurate increase in the amount of labor required, which in turn leads to an increase in the marginal product of labor.

When Firms Are Able to Increase the Amount of Physical