In a competitive industry,output is produced with skilled and unskilled labor.Factor-biased technical change that increases the productivity of skilled labor,will,at a given ratio of skilled to unskilled labor,shift any given isoproduct curve ________ the origin and ________ the absolute slope of the isoproduct curve (when the number of skilled workers is measured along the horizontal axis).Pick the best pair of answers.

Question

Quizplus · Accepted Answer

Factor-biased technical change that increases the productivity of skilled labor will shift any given isoproduct curve towards the origin (since more output can be produced with the same level of inputs) and increase the absolute slope of the isoproduct curve (since the productivity of skilled workers has increased, leading to a steeper tradeoff between skilled and unskilled labor in producing a given level of output).

In a Competitive Industry,output Is Produced with Skilled and Unskilled