1. Productivity
(a) A company that makes shopping carts for supermarkets and other stores recentlypurchased some new equipment that reduces the labor content of the jobs neededto produce the shopping carts. Prior to buying the new equipment, the company used four workers. Each worker produced an average of 80 carts per hour. Laborcost was $10 per worker per hour, and machine cost was $40 per hour. With
the new equipment, it was possible to transfer one of the workers to anotherdepartment. Machine cost increased by $10 per hour while output increased byfour carts per worker per hour, and the labor costs stayed the same.
i. Calculate labor productivity before and after the new equipment.Use carts per worker per hour as the measure of labor productivity.
ii.Calculate the multifactor productivity before and after the newequipment. Use carts per dollar cost (labor plus machine) as the measure.
iii. Calculate and comment on the changes in productivity accordingto the two measures. Which one do you believe is more appropriate for thissituation?
Read less
USA 
India