Labor productivity will increase in response to
A) Lower wages.
B) An increase in the amount of physical capital per worker.
C) Higher resource costs.
D) An increase in diminishing returns.

Question

Quizplus · Accepted Answer

An increase in the amount of physical capital per worker will lead to an increase in labor productivity because workers will have access to more and better equipment and tools to assist them in their work. This will allow them to produce more output per unit of time. Lower wages, higher resource costs, and an increase in diminishing returns may have a negative effect on labor productivity.

Labor Productivity Will Increase in Response to