3. A company has produced 2000 units of a product utilizing its old machineries and has sold them at the price of 180 million tomans in the last year. The company's labor included 1200 people with an average monthly salary of 2000000 tomans. Recently, the company found a proposal from a foreign company that rents new machineries. Its annual rent is 50 million tomans. It is expected that the labor cost decreases by 30 percent utilizing the new machine. It is desirable to calculate the total factors productivity in the last year and this year (in case of using the rental machine) assuming that production amount and selling price are to remain constant.

3. A company has produced 2000 units of a product utilizing its old machineries and has sold them at the price of 180 million tomans in the last year. The company's labor included 1200 people with an average monthly salary of 2000000 tomans. Recently, the company found a proposal from a foreign company that rents new machineries. Its annual rent is 50 million tomans. It is expected that the labor cost decreases by 30 percent utilizing the new machine. It is desirable to calculate the total factors productivity in the last year and this year (in case of using the rental machine) assuming that production amount and selling price are to remain constant.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: The Cost Of Production

Section: Chapter Questions

Problem 6PA

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