Using the Textbook's Production Function,if Two Percent More Labor Working

question 57

Multiple Choice

Using the textbook's production function,if two percent more labor working with two percent more capital produces two percent more real GDP,then "multifactor productivity" has

• A)risen by four percent.
• B)risen by two percent.
• C)remained unchanged.
• D)fallen by one percent.
• E)fallen by two percent.

---

Definitions:

Common Fixed Expenses

Expenses that remain constant in total amount and are not affected by changes in business activity level, shared across multiple business segments or products.

Business Segments

Parts of a company that can be separately identified by products provided or by geographic markets, allowing for analysis of the different areas of a business.

Variable Costing

An accounting approach that includes only variable production costs - direct materials, direct labor, and variable manufacturing overhead - in product costs, excluding fixed overhead.

Net Operating Income

The profit a company earns from its normal business operations, excluding non-operating income and expenses.