Q. The substitution of steel for wooden ploughs in agricultural production is an example

• labour-augmenting technological progress
• capital-augmenting technological progress
• capital-reducing technological progress
• None of the above

Answer: (b) capital-augmenting technological progress

Notes:

• Capital-augmenting technological progress refers to the use of technology that increases the productivity of capital inputs in the production process.
  • Substitution of steel can be considered as the substitution of a lesser machine by a better machine.
  • In this case, replacement of wooden by steel, increases the productivity of plough. Steel is costlier than wood and steel also support mechanisation there by reducing the requirement of labor. This encourages steel production. Hence it is a capital-augmenting technological progress.
• Labor augmenting is technology that increases skills and productivity of existing labor.