Labor productivity can only increase if
A) labor increases faster than capital.
B) capital increases faster than labor.
C) labor increases while capital decreases.
D) labor and capital increase at the same rate.

Question

Quizplus · Accepted Answer

Labor productivity is a measure of output per unit of labor input. Increasing the amount of capital available to workers can help them produce more output with the same amount of labor input, thus increasing labor productivity. Therefore, when capital increases faster than labor, labor productivity can also increase.

Labor Productivity Can Only Increase If