168k views
4 votes
A company has employed two workers A and B whose productivities are 20 units and 15 units respectively. The wage for A is K12 whilst B’s is K8. Are these two employees optimally employed

User Reos
by
7.7k points

1 Answer

3 votes

Answer:

The correct answer is, the employees are not employed optimally

Step-by-step explanation:

Solution

Given that,

The Optimal level of employment is determined by the ratio of productivity of workers which is equal to the ratio of wage rates.

Now,

The Productivity of A = 20

The Productivity of B = 15

The Ratio of productivities is known as = 20/15

Which is 4/3

Thus,

The Wage of A = K12

The Wage of B = K8

The Ratio of wages = K12/K8 = 3/2

(4/3) is not ≠ (3/2)

However, it is known that the ratio of wages and ratio of productivities are the same with each other.

For this, the employees are not optimally employed.

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.