Chapter 72, Problem 1MCQ

To determine

How labor and capital will consider when an automobile factory employs either assembly line workers or robotic arms to produce automobile engines.

Answer to Problem 1MCQ

From the available options, the correct option is to substitute.

Explanation of Solution

The labor and capital would consider substitute in the case when the factory employ either assembly line workers or robotic arms to produce automobile engines because the firm will use only one factor of production (either workers or machines) to produce its products. It means both products can substitute each other and with the help of any of them the factory can produce goods. Whereas, complement products require the support of both, and supplement goods are also used together. And, capital can be physical or working. Also, capital cannot exist if there is no existing labor.

Therefore, the correct option is c (substitutes).

Economics Concept Introduction

Introduction: Labor and capital are the factors of production that a firm used to produce a product in the market.