Asked by Mariam Al-khayyat on Jun 12, 2024
Verified
A cleaning company uses $20 of chemicals, $40 of labour, and $5 of misc. expenses for each house it cleans. After some quality complaints, the company has decided to increase its use of chemicals by 50%. By what % has multifactor productivity fallen?
A) 0%
B) 13.3%
C) 25%
D) 50%
E) 0.83%
Multifactor Productivity
A measure of economic performance that compares the amount of goods and services produced to the amount of combined inputs used to produce those goods and services.
Chemicals
Substances used in or produced by chemical processes, often characterized by potential reactivity and used in a wide range of industrial applications.
Labour
The workforce involved in the creation of goods and provision of services in an economy.
- Recognize elements that enhance productivity growth.
Verified Answer
LW
Logan WurtzJun 14, 2024
Final Answer :
B
Explanation :
The original cost is $65 ($20 chemicals + $40 labor + $5 misc.). After increasing chemical use by 50%, the new chemical cost is $30, making the total cost $75. The increase in cost is $10 on the original $75, which is a 13.3% decrease in productivity (since productivity is inversely related to cost).
Learning Objectives
- Recognize elements that enhance productivity growth.