If Inputs Increase by 30% and Outputs Decrease by 15

question 18

Multiple Choice

If inputs increase by 30% and outputs decrease by 15%, what is the percentage change in productivity?

• A) 100% decrease
• B) 11.54% increase
• C) 34.62% decrease
• D) 15% increase
• E) 15% decrease

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Definitions:

Average Product

The output per unit of input, such as labor or capital, calculated by dividing total output by the total quantity of the input.

Marginal Product

The additional output produced as a result of using one more unit of a particular input, holding all other inputs constant.

Capital/Labor Ratio

The capital/labor ratio is a measure used in economics to indicate the amount of capital relative to the quantity of labor used in the production process.

Labor Productivity

The measure of the economic output produced per unit of labor input.