Figure 7-16
-In Figure 7-16, as we move from A to B,
A)the relative price of machines falls.
B)total cost falls.
C)output increases.
D)labor becomes less productive relative to capital.

Question

Figure 7-16 
-In Figure 7-16, as we move from A to B,
A)the relative price of machines falls. 
B)total cost falls. 
C)output increases. 
D)labor becomes less productive relative to capital.

Quizplus · Accepted Answer

Moving from A to B represents an increase in the use of capital and a decrease in the use of labor. This leads to a higher level of output as capital is increasingly used to produce goods and services.

Figure 7-16 -In Figure 7-16, as We Move from a to B