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Homework answers / question archive / which of the following could decrease the average cost of producing automobiles in the United States? A
which of the following could decrease the average cost of producing automobiles in the United States?
A. An increase in wages paid to automobile workers.
B. A decrease in the average product of automobile workers.
C. An increase in the price of automobiles.
D. An increase in the average product of automobile workers.
E. Either A or B.
The correct answer to the given question is option D. An increase in the average product of automobile workers.
The average product of automobile workers is ascertained by dividing the total number of automobiles with the number of workers. An increase in average product of automobile workers implies an increase in the productivity of workers which implies a higher number of automobiles with the same number of workers. The average cost of producing automobiles in the United States will decrease if the average product of automobile workers decrease because the average cost of labor will reduce because of an increase in average product.
On the other hand, an increase in wages paid to automobile workers will increase the average cost of producing automobiles in the United States.
