When new technologies are applied to the production and distribution of goods and services:
A. average labor productivity decreases.
B. diminishing returns to capital no longer hold.
C. diminishing returns to capital still hold.
D. scarcity is eliminated.
Answer: C
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As a result of losing his job, Uncle Roy dropped his cable TV service and instead bought a new iPod. For Uncle Roy,
A) cable is an inferior good and the iPod is a normal good. B) cable is a normal good and the iPod is an inferior good. C) both cable and the iPod are normal goods. D) both cable and the iPod are inferior goods. E) cable and the iPod are complementary goods.
The ________ effect means that, other things remaining the same, the higher the wage rate, the less time people will spend working and the more time people will spend at leisure
A) price B) labor C) income D) substitution