Labor saving nonneutral technical progress allows a firm to
A)produce more output with the same inputs.
B)use less labor and the same amount of other inputs to produce the same level of output.
C)use more labor to produce the same level of output.
D)use less labor and more of other inputs to produce the same level of output.

Question

Quizplus · Accepted Answer

Labor saving nonneutral technical progress refers to a situation where a firm can produce the same level of output using less labor and the same amount of other inputs. This allows the firm to save on labor costs and increase profitability. Option A is incorrect because it suggests that the firm can produce more output with the same inputs, which is not the case with labor-saving progress. Option C is incorrect because it suggests that the firm would need to use more labor to produce the same level of output, which is also not true for labor-saving progress. Option D is also incorrect because it suggests that the firm would need to use more of other inputs, which is not a feature of labor-saving progress.

Labor Saving Nonneutral Technical Progress Allows a Firm to