If capital per worker rises,

Question

Quizplus · Accepted Answer

When capital per worker rises, it means that each worker has access to more physical capital to work with, such as machinery or technology. This leads to an increase in labor productivity as workers can use these resources to produce more output per hour of work. Therefore, choice C is the correct answer. Firms may raise their prices to account for a higher level of production, but it is not the direct result of capital per worker rising. Labor productivity can only increase with technological progress, which is not mentioned in the question stem.

If Capital Per Worker Rises