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

1. The question asks to classify the substitution of steel for wooden ploughs in agricultural production. 2. Both wooden ploughs and steel ploughs represent capital inputs in agricultural production. 3. Technological progress can augment either labor or capital. Labour-augmenting technological progress increases the productivity of labor (e.g., a tractor allowing one farmer to do the work of many). Capital-augmenting technological progress increases the quality or productivity of capital (e.g., a more durable or efficient machine). 4. Replacing a wooden plough with a steel one improves the quality, durability, and potentially the efficiency of the capital good (the plough) itself. It makes the capital input more productive or effective. This directly enhances the contribution of the capital used. 5. Capital-reducing technological progress would imply achieving the same output with less capital, which is not the case here (it's an upgrade of capital). 6. Therefore, this substitution is an example of capital-augmenting technological progress. The correct option is (B).