Labor-augmenting (improving) technology causes which of the following? (i) The marginal productivity of labor increases. (ii) The marginal productivity of labor decreases. (iii) Labor demand (MRP) shifts to the right. (iv) Labor demand (MRP) shifts to the left.

Respuesta :

Answer:

Answer to this is both option (i) and option (iii).

Explanation:

Change in technology generally affects the change in productivity as well as the change in labor demand. In the case of Labor-augmenting (improving) technology, it is found that the positive change in technology leads to the increasing marginal productivity of labor. This increase of marginal productivity of labor shifts the labor-demand curve towards right. Thus, Labor-augmenting (improving) technology causes marginal productivity of labor to increase which further leads to shifting of the labor-demand curve towards right.

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