Suppose Two Goods (X and Y )Are Being Produced Efficiently

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.