During the early phases of industrialization, the number of people engaged in agriculture usually drops sharply, even as agricultural output is growing. Given what you know about production technology and production functions, explain this seeming inconsistency.
Output increases with less labor because:
Part 2
A.
added capital increases the productivity of labor.
B.
using less labor increases production capacity.
C.
added capital increases how quickly labor's returns become diminishing.
D.
agricultural production becomes more labor-intensive.
E.
decreased capital increases agricultural output.