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Imagine the two factor-model of production, with high- and low-skill labor. Also, imagine that the firm is currently employing the optimal amount of each kind
Imagine the two factor-model of production, with high- and low-skill labor. Also, imagine that the firm is currently employing the optimal amount of each kind of labor according to relative wages and productivity, and that high-skill workers currently have a higher marginal product than low-skill workers. If the productivity of both kinds of workers doubles, and the firm doesn't change its employment levels, then the firm will be: Group of answer choices Its impossible to say. Employing too many high-skill workers Employing too many low-skill workers Still employing the right mix of workers
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