In a Particular Country in 2000,the Average Worker Needed to Work

question 72

Multiple Choice

In a particular country in 2000,the average worker needed to work 40 hours to produce 55 units of output.In that same country in 2008,the average worker needed to work 30 hours to produce 45 units of output.In that country,the productivity of the average worker

• A)decreased by about 6 percent between 2000 and 2008.
• B)remained unchanged between 2000 and 2008.
• C)increased by about 9 percent between 2000 and 2008.
• D)increased by about 18 percent between 2000 and 2008.

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Definitions:

Fixed Cost

Business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance premiums.

Financial Leverage

The use of borrowed funds with a fixed cost in an attempt to increase the returns to shareholders by magnifying investment gains or losses.

EBIT

Earnings Before Interest and Taxes, a financial metric that calculates a firm’s profit excluding interest and income tax expenses.

Variable Cost

A cost that varies directly with the level of production or volume of output, as opposed to fixed costs, which remain constant regardless of activity level.