Suppose that additional units of capital affect the marginal productivity of labor. This is not unrealistic. Word processors increase the marginal productivity of secretaries
On the other hand, robotic equipment can completely replace a worker and, thereby, lower the marginal productivity of labor. Given this possibility, determine the conditions under which isoquants will not be convex (i.e., concave).
The slope of the isoquant equals -MPL/MPK. To be concave, the slope of the isoquant becomes steeper as L increases. For this to be the case, MPL would have to increase more than MPK as labor increases and capital falls. That means the decrease in capital causes MPL to rise more than the increase in labor causes MPL to fall. The large inverse relationship implies that capital is replacing labor for this to be the case.
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When majority rule voting is used to determine whether to purchase a public good,
A) the efficient outcome is not assured. B) the median voter gets her way. C) the sum of the marginal benefits is ignored. D) All of the above.
_______________ have been unable to organize a union in any of the foreign-owned factories owned by Honda, Toyota, and Nissan.
A. The United Autoworkers B. The National Education Association C. The International Brotherhood of Teamsters D. The Service Employees International Union