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------------------------------------------------ If there is an increase in the number of workers, all else equal, the effect on capital per worker will be: _________

Answer :

Answer: b. Negative

Explanation:

If there is more labor being employed while Capital remains the same then it would mean that the amount of Capital due to each worker will keep dropping i.e be negative.

This can present a problem because it will lead to less real wages for workers as well as less productivity for firms. Workers will typically seek to move to areas with high capital to labor rates as they seek to earn higher wages.

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