Suppose Technological Improvements Reduced the Cost of Producing Automobiles by 50

Question 65
Multiple Choice

Suppose technological improvements reduced the cost of producing automobiles by 50 percent,causing the price of automobiles to decline by a similar amount.Which of the following would necessarily result from this development? A)Employment in the automobile industry would decrease. B)Real income would increase. C)Real income would decrease. D)Both a and c are correct.