An improvement in technology that allows workers to process twice as many insurance forms in an hour than before will result in ____
A)an increase in the employment of labor because the marginal product of labor has decreased.
B)an increase in insurance premiums.
C)a decrease in the employment of labor because the marginal product of labor has decreased.
D)an increase in the employment of labor because the marginal revenue product of labor has increased.
E)a decrease in the employment of labor because its marginal revenue product has increased.

Question

Quizplus · Accepted Answer

An improvement in technology increases the productivity of labor, meaning each worker can process more forms in an hour. This increases the marginal product of labor, making each worker more valuable to the employer, which typically leads to an increase in the demand for labor, assuming the demand for processed insurance forms remains stable or increases.

An Improvement in Technology That Allows Workers to Process Twice