A decrease in the capital-labor ratio would result in:
A)higher labor productivity because labor does more work.
B)lower labor productivity because labor is working with relatively less capital.
C)higher labor productivity because labor is producing less capital and more of other goods.
D)lower labor productivity because more capital is available.
E)higher labor productivity because more capital is available.

Question

Quizplus · Accepted Answer

The capital-labor ratio measures the amount of capital per worker in a production process. If the ratio decreases, it means there is less capital available per worker, which would result in lower labor productivity. The workers are working with relatively less capital, making it harder for them to produce efficiently. Therefore, option B is the correct answer.

A Decrease in the Capital-Labor Ratio Would Result In