Question

UPSC Prelims 2015 Question:

The substitution of steel for wooden plows in agricultural production is an example of

1. labour-augmenting technological progress
2. capital-augmenting technological progress
3. capital-reducing technological progress
4. None of the above

Answer (Detailed Solution Below)

Option 2: capital-augmenting technological progress

Detailed Solution

Explanation:

Labour augmenting technologies involve an improvement of skill, quality improvement and increase in labour productivity.
Capital augmenting technologies involve the improvement in the quality of capital goods.
In this case, the substitution of steel for wooden plough is a capital augmenting technological progress.

Therefore, option (2) is the correct answer.

Subject: Economics | Miscellaneous(eco)

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