An economy increases the amount of physical capital per worker. At the same time, human capital per worker, the number of workers, and the level of the technical means of the production of goods and services is held constant. In this economy, output per worker will MOST likely:

Question

Glenn Key

Business

29 January, 16:58

An economy increases the amount of physical capital per worker. At the same time, human capital per worker, the number of workers, and the level of the technical means of the production of goods and services is held constant. In this economy, output per worker will MOST likely:

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Chambers · Answer 1

increase since his/her productivity will increase

Explanation:

An increase in physical capital generally increases worker productivity even if all the other factors of production remain the same. Physical capital includes machinery, buildings, computers, tools, etc., which make it easier for the workers to perform their tasks, therefore it increases their productivity.

E. g. a worker needs to deliver goods, and if he uses a delivery truck instead of a bicycle, he/she will be able to do it faster. That will allow the worker to make more deliveries per day ⇒ increase in the worker's productivity. The delivery truck represents the increase in physical capital.