Last Year a Country Had 800 Workers Who Worked an Average

question 134

Multiple Choice

Last year a country had 800 workers who worked an average of 8 hours and produced 12,800 units.This year the country had 1000 workers who worked an average of 8 hours and produced 14,000 units.This country's productivity was

• A) higher this year than last year.A possible source of this change in productivity is a change in the size of the capital stock.
• B) higher this year than last year.A change in the size of the capital stock does not affect productivity.
• C) lower this year than last year.A possible source of this change in productivity is a change in the size of the capital stock.
• D) lower this year than last year.A change in the size of the capital stock does not affect productivity.

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Definitions:

Factory Depreciation

The allocation of the cost of a factory's physical assets over its useful life, recognizing the assets' wear and tear, deterioration, or obsolescence.

Property, Plant, and Equipment

Long-term tangible assets owned by a business, used in its operations to generate income, usually including buildings, machinery, and vehicles.

Net Operating Income

An indicator of a firm's earnings derived from its primary, ongoing business activities, not taking into account the subtraction of interest and taxes.

Retained Earnings

The portion of a company's profits that is saved or retained for reinvestment in the business, rather than being paid out as dividends to shareholders.