If workers for a firm have mainly general human capital,then when the demand for its output falls,the firm will mainly

Question

Quizplus · Accepted Answer

When the demand for a firm's output falls, the firm will generally need to produce less, which means that they will need fewer workers. Since the workers hired by the company have mostly general human capital, they will not have specific skills that are unique to the firm, and therefore, the firm will be less likely to invest in training them. This means that the firm will most likely cut back on its employment levels rather than investing in training its workers. Therefore, the best choice is B, which states that the firm will cut back on employment.

If Workers for a Firm Have Mainly General Human Capital,then