In Vintland, sanitation engineers are being replaced with garbage robots, which have fewer negative effects and many more signif
icant benefits. However, the labor cost efficiency of garbage robots has driven down the price of collecting garbage so significantly that sanitation engineers can no longer compete. After six months, everybody has switched to the cheaper and better garbage robots. Please select the choice below that best describes the short-run effects of this industrial change on Vintland\'s GDP and its standard of living. Assume that Vintland consumes the same quantity of collecting garbage now as they did six months ago.
A. GDP increases and standard of living decreases
B. GDP and standard of living both increase
C. GDP and standard of living both decrease
D. GDP decreases and standard of living increases
E. There is not enough information to answer this question
Answer: GDP decreases and standard of living increases
Explanation:
Based on the information given, the short-run effects of this industrial change on Vintland's GDP and its standard of living is that there'll be a reduction in the gross domestic product and an increase in the standard of living.
The reduction in GDP will be as a result of the reduction in the price of collecting garbage. On the other hand, the replacement of the sanitation engineers with the garbage robots will have fewer negative effects and many more significant benefits, thereby increasing standard of living.
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