Question

Over a​ five-year span, the Acme Company reduced the amount of labor it hired. At the same​ time, the marginal productivity of labor increased. Which of the following is a possible explanation for this​ observation

a. Organizational innovation
b. The law of diminishing marginal returns
c. Labor saving technical change
d. All of the above

Answer 1

D) all of the above

Step-by-step explanation:

Probably the single most labor reducing factor is new technology and how it is applied within a business. Automation is probably the single most important labor reducing factor in the US over the last 30 years. This is specially for factory workers, since automation is responsible for fewer industry jobs, not China.

New technologies increase marginal returns for labor and they also have changed organizations completely.

Computers, the internet, smartphones, Amazon, etc., have changed our world. Even the military has changed, a pilot can be located inside a US base and his airplane is flying a mission in the Middle East.