Asked by Marissa Aguilar on Jun 20, 2024
Verified
White-collar employment has risen sharply since the introduction of computers,so clearly the
A) output effect has outweighed the substitution effect.
B) substitution effect has outweighed the output effect.
C) substitution and output effects are equal.
White-collar Employment
Jobs that typically involve professional, managerial, or administrative work, often in an office setting, as opposed to blue-collar jobs that involve manual labor.
Substitution Effect
The change in demand for a good due to a change in its price, leading consumers to substitute it with another product.
Output Effect
When the price of any resource rises, the cost of production rises, which, in turn, lowers the supply of the final product. When supply falls, price rises, consequently reducing output.
- Differentiate between output and substitution effects in employment due to technological changes.
Verified Answer
DD
david delaneyJun 26, 2024
Final Answer :
A
Explanation :
The question is asking whether the increase in computer usage has led to more white-collar jobs due to the output effect (which leads to increased demand for labor) or the substitution effect (which leads to replacing human labor with computers). The fact that white-collar employment has risen sharply suggests that the output effect has outweighed the substitution effect. Therefore, the best choice is A.
Learning Objectives
- Differentiate between output and substitution effects in employment due to technological changes.