The substitution of steel for wooden ploughs in agricultural production is an example of:
✓ Correct answer: b) capital-augmenting technological progress
ExplanationThis is because the replacement of wooden ploughs (a less durable, less efficient tool) with steel ploughs (which are more durable, efficient, and require less labor for maintenance and use) leads to increased productivity per unit of capital, i.e., the plough itself.This represents a shift towards more capital-in- tensive technology.This is capital-augmenting rather than labor-augmenting progress because the improvement is in the capital itself (the plough), making it more productive, rather than increasing the labor force or improving labor productivity directly.Labour Augmenting is technology that increases skills and productivity of the existing labour force (example - teaching people how to use the computer).Capital Augmenting technology enhances the productivity of existing capital goods.In this case, replacement of wood by steel, increases the productivity of plough.52
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