UPSC Prelims 2015 · Question 90 of 98
UPSC Prelims 2015 question on Capital Augmenting Technical Progress
- ExamUPSC CSE
- Year2015
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicIndustry
- DifficultyMedium
- TypeDirect
The substitution of steel for wooden ploughs in agricultural production is an example of
Show answer
Answer: B. capital-augmenting technological progress
Verdict
The answer is capital-augmenting technological progress. Replacing a wooden plough with a steel one raises the productivity of the capital good itself.
Analysis
Labour augmenting progress raises the effectiveness of existing labour, as when workers are trained in a new skill, so that each worker accomplishes more without any change in equipment. Capital augmenting progress raises the productivity of existing capital goods, which is exactly what happens when the plough, a capital good, is made of steel instead of wood and does more work per unit. Capital reducing progress would mean achieving the same output with less capital, which is not what a stronger implement does, and the fourth option therefore also fails.
Source
Academic material on theories of development.
How to crack it
Identify which factor of production the change is embodied in, because that determines the label directly. A change in a tool or machine is embodied in capital, while a change in skill, health or education is embodied in labour. Ask where the improvement physically sits and the classification follows. This applies across growth theory questions, where the distinction between factor augmenting progress and factor saving progress is the recurring test.