In the context of economic development, capital deepening refers to which of the following situations?

Introduction / Context:
Capital deepening is a key term in development economics and growth theory. It helps explain how increasing the amount of capital available for each worker can raise productivity and output per head. Understanding this concept is important for interpreting discussions about investment, technology, and long term economic growth. This question requires you to select the description that best matches the idea of capital deepening.

Given Data / Assumptions:

• We are concerned with the relationship between capital and labour in production.
• Capital refers mainly to physical or fixed capital, such as machinery, tools, and equipment.
• Labour refers to the workforce engaged in production.
• The question is about what changes when capital deepening occurs.

Concept / Approach:
Capital deepening occurs when the amount of capital per worker increases. This can happen through higher investment, better technology, or replacement of old equipment with more advanced machines. When each worker has more or better capital to work with, labour productivity tends to rise, which can support higher wages and improved living standards. This is conceptually different from simply adding more workers while keeping capital constant, which is often called capital widening. It also differs from changes in ratios like capital output ratio if there is no increase in capital per worker.

Step-by-Step Solution:
Step 1: Focus on the wording “capital deepening” and relate it to capital per worker. Step 2: Recall that deepening means making something more intense or greater in depth, here meaning more capital for each unit of labour. Step 3: Identify the option that clearly states an increase in fixed capital per worker. Step 4: Confirm that this description matches standard textbook definitions of capital deepening.

Verification / Alternative check:
A quick check is to compare capital deepening with capital widening. Capital widening generally refers to adding capital just enough to maintain a given capital labour ratio when the labour force grows. Deepening, in contrast, refers to increasing the capital labour ratio itself. Option A captures this idea by explicitly stating more fixed capital per worker, confirming it as the correct choice.

Why Other Options Are Wrong:
Emphasis on social overhead capital: While infrastructure is important, simply investing in roads and bridges does not by itself define capital deepening unless it increases capital per worker across the economy.
Constant capital output ratio: This indicates a stable relationship between capital and output, but does not directly tell us about capital per worker, so it is not the definition of capital deepening.
Increasing capital output ratio: A rising capital output ratio can even suggest less efficient use of capital, and again does not necessarily describe more capital per worker.

Common Pitfalls:
Students sometimes confuse capital deepening with any form of investment or with general infrastructure development. Another pitfall is to focus on macro ratios like the capital output ratio without relating them back to what each worker has at their disposal. Always remember that capital deepening is specifically about raising the amount and quality of capital per worker, which is central to long term productivity growth.

Final Answer:
Capital deepening refers to going for more fixed capital per worker in the production process.