The wage paid to labor should increase when:
A) the capital-labor ratio increases.
B) the capital-labor ratio decreases.
C) a country's labor force increases.
D) a country's capital stock decreases.

Question

Quizplus · Accepted Answer

When the capital-labor ratio increases, it means there is more capital per worker. This typically leads to higher productivity per worker, which can justify and support higher wages.

The Wage Paid to Labor Should Increase When