Would an increase in the productivity of labor lead to an ...

[jrubin]

Would an increase in the productivity of labor lead to an increase or a decrease in the demand for labor? Why?

Question 2

Which of the following statistics confirm the rise in de-integration in the U.S. post 1970s?
 a. The average number of industrial sectors a firm operated in increased substantially in 1997.
  b. Employment in the business services industry that supplied contract employees grew by almost five times as much as non-farm employment.
  c. Between 1977 and 1999, imports of the U.S. firms from foreign affiliates as a percentage of total imports increased substantially.
  d. Between 1977 and 1999, imports of the U.S. firms from unrelated suppliers as a percentage of total imports declined.

[iman]

Answer to Question 1

An increase in productivity would lead to an increase in the marginal revenue product of labor. With a higher marginal revenue product we would expect to see an increase in demand. A firm would be likely to utilize more labor and less of other resources if labor has become more productive.

Answer to Question 2

B