Multiple Choice
Which factor of production is employed by the largest number of U.S. businesses?
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0. Basic Principles of Economics
Factors of Production
Multiple Choice
An industry has lowered its labor costs through which of the following methods?
A
Reducing the use of capital equipment
B
Increasing automation and adopting new technology
C
Raising wages for all employees
D
Expanding the workforce without changing production methods
Verified step by step guidance1
Step 1: Understand the concept of labor costs, which include wages, benefits, and other expenses related to employing workers.
Step 2: Recognize that reducing labor costs means lowering the expenses associated with labor without necessarily reducing output.
Step 3: Analyze each option to see how it affects labor costs: reducing capital equipment does not directly lower labor costs; raising wages increases labor costs; expanding the workforce without changing production methods likely increases total labor costs.
Step 4: Identify that increasing automation and adopting new technology can reduce the need for labor or make labor more efficient, thereby lowering labor costs.
Step 5: Conclude that the method which lowers labor costs is increasing automation and adopting new technology, as it improves productivity and reduces reliance on labor.
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