Suppose Two Goods (X and Y)are Being Produced Efficiently and That

Multiple Choice

Suppose two goods (x and y) are being produced efficiently and that the production of x is always more labor intensive than the production of y.Production depends only on two factors (capital and labor) ;these may be smoothly substituted for each other.The total quantities of these inputs are fixed.An increase in the production of x and a decrease in the production of y will:

A) increase the capital-labor ratio in each firm.
B) decrease the capital-labor ratio in each firm.
C) leave the capital-labor ratio for each firm unchanged.
D) increase the capital-labor ratio in y production and decrease the capital-labor ratio in x production.