In recent years,garbage collection has changed dramatically.Twenty-five years ago a crew of up to 4 or 5 workers and 1 truck collected residential garbage.Now collection is often done by one driver and 1 more fully automated truck.What is an explanation for this change?
A)Over long periods of time,labour is always replaced by capital.
B)Over long periods of time,capital is always replaced by labour.
C)Firms and municipalities substituted away from an increasingly expensive factor (labour)and toward an increasingly inexpensive factor (capital).
D)Firms and municipalities substituted away from a factor whose price was falling (labour)and toward a factor whose price was rising(capital).
E)The marginal product of labour was falling over time while the marginal product of capital was rising.

Question

Quizplus · Accepted Answer

Firms and municipalities substituted away from an increasingly expensive factor (labour) and toward an increasingly inexpensive factor (capital). The switch to fully automated trucks allows for a reduction in the number of workers required for garbage collection, which reduces labor costs. At the same time, the cost of automated trucks has been decreasing, making them a relatively cheaper option compared to manual labor. Therefore, the reason for the change is due to the substitution of labor with capital due to its increasing cost.

In Recent Years,garbage Collection Has Changed Dramatically