If the capital stock remains fixed while the supply of labor increases, it is likely that:
A) output per capita will rise.
B) the productivity of labor will not change.
C) the new labor will be less productive than the old labor.
D) the new labor will be more productive than the old labor.

Question

Quizplus · Accepted Answer

When the capital stock is fixed and labor supply increases, the additional labor has less capital to work with, leading to diminishing returns and lower productivity for the new labor compared to the existing labor.

If the Capital Stock Remains Fixed While the Supply of Labor