Question

As part of a study for the Dept. of Labor Statistics, you are assigned the task of evaluating the improvement in productivity of small businesses. Data for one of the small businesses you are to evaluate is are shown below: Note - Labor: $10 per hour, Capital: 0.50% per month of investment, Energy: $0.60 per BTU .Show calculation process with answers in three decimal places. The data are the monthly average of last year and the monthly average of this year. Determine the multifactor productivity with dollars as the common denominator for:. Last year This year 3) . Then determine the percent change in productivity for the monthly average last year versus the monthly average on a multifactor basis. 2. Three small companies in the same industry are competing with each other with the following input and output during the same period of operations:

A) Rank companies according to productivity (Highest to lowest):
B) For the least productive company, calculate the desired output, while holding the same level of input, to be comparable to the most productive company, which is called a benchmark. Answer)
C) What are the five reasons productivity is difficult to improve in the service sector?

Answer 1

Productivity in the U.S. is measured by the dollar value per hour contributed by workers, excluding government and farming sectors. Historical data shows more than a doubling in productivity since the 1970s, with fluctuations in growth rates over subsequent decades. Comparing productivity levels and growth rates between countries can forecast which will have higher productivity in the future.

Step-by-step explanation:

The productivity measure used commonly in the U.S. reflects the dollar value per hour contributed by a worker to the employer's output. This measure does not include government employees due to the non-market nature of their work, nor does it include farming, which is a minor part of the U.S. economy. Looking at historical data, productivity has more than doubled since the 1970s, suggesting significant improvements in efficiency and output in the non-farming, non-government sectors of the economy.

For worker productivity comparisons, we can compare growth rates over time. For instance, if the productivity level of a Canadian worker is $30 per hour and grows at 1% per year, while a UK worker's productivity is $25 but grows at 3% per year, after five years, the UK worker's productivity would surpass the Canadian worker's. Using the formula for compound growth, P = P0(1 + r)^t, where P is the future productivity level, P0 is the initial productivity level, r is the growth rate, and t is time in years, the calculations would reveal the precise figures.

Moreover, U.S. productivity growth rates have fluctuated, with strong growth in the 1950s, a decline in the 1970s through the 1980s, rising again in the 1990s and early 2000s, with variations in annual rates averaging 3.2% from 1950 to 1970, then slowing to 1.9% from 1970 to 1990, and climbing back over 2.3% from 1991 onwards, with a slight slowdown after 2001. Monitoring productivity trends is crucial for understanding economic health and potential for future growth.