Behind the Supply Curve-End of Chapter Problem An increase in labor productivity means that each worker can produce more output. Recent data on productivity show that labor productivity in the U.S. nonfarm business sector grew by 1.7% between 1970 and 1999, by 2.6% between 2000 and 2009, and by 1.0% between 2010 and 2019. c. When productivity growth is positive, what happens to the marginal cost curve and the average total cost curve? Illustrate your answer in the diagram. Cost of unit Inc d. If labor costs rise over time on average, why would a company want to adopt equipment and methods that increase labor productivity? Increases in labor productivity will raise the cost of production, counteracting the effects of the labor cost increase. Increases in labor productivity will lower the cost of production, counteracting the effects of the labor cost increase. ✓ Increases in labor productivity will raise the cost of production, counteracting the effects of the labor cost increase. Increases in labor productivity will raise the cost of production, amplifying the effects of the labor cost increase. Increases in labor productivity will lower the cost of production, amplifying the effects of the labor cost increase. Incorrect Quantity of output MC HH ATC
Behind the Supply Curve-End of Chapter Problem An increase in labor productivity means that each worker can produce more output. Recent data on productivity show that labor productivity in the U.S. nonfarm business sector grew by 1.7% between 1970 and 1999, by 2.6% between 2000 and 2009, and by 1.0% between 2010 and 2019. c. When productivity growth is positive, what happens to the marginal cost curve and the average total cost curve? Illustrate your answer in the diagram. Cost of unit Inc d. If labor costs rise over time on average, why would a company want to adopt equipment and methods that increase labor productivity? Increases in labor productivity will raise the cost of production, counteracting the effects of the labor cost increase. Increases in labor productivity will lower the cost of production, counteracting the effects of the labor cost increase. ✓ Increases in labor productivity will raise the cost of production, counteracting the effects of the labor cost increase. Increases in labor productivity will raise the cost of production, amplifying the effects of the labor cost increase. Increases in labor productivity will lower the cost of production, amplifying the effects of the labor cost increase. Incorrect Quantity of output MC HH ATC
Chapter1: Making Economics Decisions
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Transcribed Image Text:Behind the Supply Curve-End of Chapter Problem
An increase in labor productivity means that each worker can
produce more output. Recent data on productivity show that
labor productivity in the U.S. nonfarm business sector grew
by 1.7% between 1970 and 1999, by 2.6% between 2000 and
2009, and by 1.0% between 2010 and 2019.
c. When productivity growth is positive, what happens to the
marginal cost curve and the average total cost curve?
Illustrate your answer in the diagram.
Cost of unit
Inc
d. If labor costs rise over time on average, why would a
company want to adopt equipment and methods that
increase labor productivity?
Increases in labor productivity will raise the cost of
production, counteracting the effects of the labor cost
increase.
Increases in labor productivity will lower the cost of
production, counteracting the effects of the labor
cost increase.
✓ Increases in labor productivity will raise the cost of
production, counteracting the effects of the labor
cost increase.
Increases in labor productivity will raise the cost of
production, amplifying the effects of the labor cost
increase.
Increases in labor productivity will lower the cost of
production, amplifying the effects of the labor cost
increase.
Incorrect
Quantity of output
MC
HH
ATC
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