Consider two farms, A and B. The input use and output are given in the following table. The wage = $80 per day and rental price of the machines = $100 per day Farm Labour(L) Physical capital(K) Output(Q) Q/L Q/K TFP A 2 2 200 ? ? ? B 4 1 200 ? ? ? Which farm is more productive according to the productivity measures? Which of the three measures is the most informative measure of agricultural productivity? Why?
Consider two farms, A and B. The input use and output are given in the following table. The wage = $80 per day and rental price of the machines = $100 per day Farm Labour(L) Physical capital(K) Output(Q) Q/L Q/K TFP A 2 2 200 ? ? ? B 4 1 200 ? ? ? Which farm is more productive according to the productivity measures? Which of the three measures is the most informative measure of agricultural productivity? Why?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 3E
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Question
Consider two farms, A and B. The input use and output are given in the following table. The wage = $80 per day and rental price of the machines = $100 per day
Farm |
Labour(L) |
Physical capital(K) |
Output(Q) |
Q/L |
Q/K |
TFP |
A |
2 |
2 |
200 |
? |
? |
? |
B |
4 |
1 |
200 |
? |
? |
? |
- Which farm is more productive according to the productivity measures?
- Which of the three measures is the most informative measure
of agricultural productivity? Why?
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