Assume that labor is measured along the horizontal axis and capital is measured along the vertical axis. If the decreases as we move inward toward the origin along the ray (slope of the isoquant becomes flatter), we are observing:
A)neutral technological progress.
B)labor-saving technological progress.
C)capital-saving technological progress.
D)both labor-saving and capital-saving technological progress.

Question

Quizplus · Accepted Answer

Labor-saving technological progress is indicated by a flatter slope of the isoquant as we move inward, meaning less labor is needed in combination with capital to produce the same level of output.

Assume That Labor Is Measured Along the Horizontal Axis and Capital