Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Hire more unskilled workers to maximize output since each worker is now more productive.
B
Reduce the number of unskilled workers since fewer workers are needed to produce the same output.
C
Maintain the current number of unskilled workers as the increase in productivity does not affect overall demand.
D
Hire skilled workers instead, as technology increases the need for more educated labor.
Understanding the Answer
Let's break down why this is correct
Answer
When a company adopts advanced automation technology that boosts the productivity of unskilled labor, it means that each worker can produce more goods or services. This increase in productivity raises the marginal revenue product of labor, which is the additional money the company earns from hiring one more worker. In response to this change, the company should consider hiring more unskilled workers because they are now more valuable to the business. For example, if the company used to make $100 with one worker but can now make $150 due to the new technology, it makes sense to hire additional workers to maximize profit. Overall, the company should adjust its hiring strategy to take advantage of the increased productivity and revenue potential.
Detailed Explanation
With the new technology, each unskilled worker can produce more. Other options are incorrect because Some might think more workers are needed since they are more productive; It's a common mistake to think that productivity changes don't affect hiring.
Key Concepts
Impact of Technology on Labor Demand
Marginal Revenue Product of Labor
Productivity
Topic
Impact of Technology on Labor Demand
Difficulty
hard level question
Cognitive Level
understand
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