Economics · Production Theory
In Hicks' classification of technical progress with a constant labour-to-capital ratio, consider the following statements: (I) Technical progress is labour-saving if it raises the marginal product of labour in greater proportion than the marginal product of capital. (II) Technical progress is capital-saving if it raises the marginal product of labour in greater proportion than the marginal product of capital. Which of the above statement(s) is/are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both Statements (I) and (II) are incorrect
- 2Both Statements (I) and (II) are correct
- 3Only Statement (II) is correct✓
- 4Only Statement (I) is correct
Correct answer
Only Statement (II) is correct
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