Asked by Timofei Bolshev on May 12, 2024
Verified
When a firm adds physical capital,labor will become more productive in the short run.
Physical Capital
Consists of tangible, man-made objects that a business uses to produce goods or services, such as buildings, machinery, and equipment.
Short Run
A period in economics where at least one factor of production is fixed, limiting the ability of the economy or firm to adjust to changes in demand or supply.
Productive
Relating to or involving the creation of goods or services that satisfy human wants; the efficiency and effectiveness in producing outputs from inputs.
- Understand the effects of incorporating physical capital on a company's expenses and efficiency.
- Understand the effects of labor’ productivity on costs and output scale.
Verified Answer
JG
Jessica GomezMay 12, 2024
Final Answer :
True
Explanation :
Adding physical capital, such as machinery or equipment, can improve the efficiency of labor and lead to higher productivity in the short run. This is because the new capital allows workers to produce goods or services more quickly and with less effort, thereby increasing output per hour worked. However, over the long run, the effects of physical capital on productivity may diminish as workers become accustomed to the new equipment and its benefits level off.
Learning Objectives
- Understand the effects of incorporating physical capital on a company's expenses and efficiency.
- Understand the effects of labor’ productivity on costs and output scale.