2015 · EconomyPrevious Year Question
Q90.
The substitution of steel for wooden ploughs in agricultural production is an example of
A. labour-augmenting technological progress
B. capital-augmenting technological progress
C. capital-reducing technological progress
D. None of the above
Answer

B

Explanation

Labor augmenting is technology that increases skills and productivity of existing labor force (example - teaching people how to use the computer). Capital augmenting technology increases productivity of existing capital goods. In this case, replacement of wooden by steel, increases the productivity of plough.