📚 Learning Guide
Impact of Technology on Labor Demand
easy

If the introduction of automation in a factory leads to fewer workers needed for the same output, then the relationship between technology and labor demand can be analogized as: Increased productivity in a factory : Increased demand for skilled labor :: Increased automation : ?

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Choose the Best Answer

A

Decreased demand for unskilled labor

B

Increased wages for all workers

C

More hiring of unskilled labor

D

No change in labor demand

Understanding the Answer

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Answer

When a factory uses automation, it can produce more goods with fewer workers, which changes the demand for labor. This means that as factories become more productive due to technology, they often need more skilled workers to operate and maintain the machines. For example, if a factory introduces robots that can assemble products quickly, it might not need as many unskilled workers, but it will need a few skilled technicians to manage the robots. Therefore, the relationship can be understood as: Increased productivity in a factory : Increased demand for skilled labor :: Increased automation : Decreased demand for unskilled labor. This shows how technology can shift the types of jobs available, emphasizing the need for different skills in the workforce.

Detailed Explanation

When machines do more work, fewer unskilled workers are needed. Other options are incorrect because Some might think that fewer workers means higher pay for those who stay; It seems logical to think more machines would need more workers, but actually, machines replace unskilled jobs.

Key Concepts

Impact of Technology on Labor Demand
Marginal Revenue Product of Labor
Labor Market Dynamics
Topic

Impact of Technology on Labor Demand

Difficulty

easy level question

Cognitive Level

understand

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