Final answer:
The Rucker plan is based on the ratio change between labor costs and dollar value added, encouraging productivity through wage incentives tied to company performance. It also reflects how union demands for higher wages can push firms to invest in machinery, leading to fewer but more productive workers due to better equipment. Option D is correct answer
Step-by-step explanation:
The plan based on a change in the ratio between labor costs and dollar value added is called the Rucker plan. This approach to wage payment is aimed at increasing productivity by linking pay to the overall performance of a company. Companies that adopt plans such as the Rucker plan may provide incentives for workers to be more efficient, as their compensation is tied to the value they add to the company's products or services.
When management responds to union demands for higher wages by investing more in machinery, it can result in increased productivity for union workers who have access to more or better physical capital equipment. However, it also means the company may employ fewer workers due to the higher cost efficiency of using more advanced technology. This shift to a higher capital-to-labor ratio is an illustration of how the dynamics between labor costs and technology investments can influence a company's staffing and production strategies.