Labor productivity increases when
A) labor and output increase proportionately.
B) capital increases and labor remains constant.
C) output decreases and labor increases.
D) capital/labor ratio decreases.

Question

Quizplus · Accepted Answer

Labor productivity increases when the amount of output produced per unit of labor increases. This can happen when capital (tools, equipment, technology) increases while the amount of labor remains constant, as it allows each worker to produce more output due to better or more tools and equipment at their disposal.

Labor Productivity Increases When