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Consider a Firm That Produces Output Using Labor and Capital

Question 34

Multiple Choice

Consider a firm that produces output using labor and capital. The firm's stock of capital is fixed and in order to increase output, it must employ more workers. Which of the following occurs as the number of workers increases?


A) Output per worker rises.
B) Capital per worker falls.
C) Wage per worker falls.
D) Total output increases exponentially.

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