Employment in the Oil Fields Increased Rapidly Beginning in 2005

Employment in the oil fields increased rapidly beginning in 2005, reaching a peak of between 100,000 and 110, 000 workers in 2012, where employment remained until early 2016. Then, employment began a rapid decline as oil prices dropped by more than half. By early 2019, oil prices had risen by almost 50 percent since 2016 and production had risen by more than 30 percent, but employment was almost 20 percent lower. Which of the following statements best describes this situation in the oil industry?

A) Since new technology was not used to drill existing oil wells, the operation of those wells did not constitute technological change. The only technological change occurred when new wells were drilled using new technology.
B) The scenario described in the question is not technological change because the oil companies still needed to hire employees to to operate machinery.
C) The oil companies were able to produce more output using fewer inputs, in this case labor. Therefore, the oil companies had implemented a positive technological change.
D) The scenario described is an example of management efficiency at the oil companies but not technological change. Essentially, the companies changed their way of operating their businesses.

Correct Answer:

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