Question

Problem 2-4 A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces t labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used five worke who together produced an average of 80 carts per hour. Workers receive $10 per hour, and machine cost was $40 per hour. With t new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $10 per ho while output increased by four carts per hour. a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. Before 16 carts per worker per hour 21.5 carta per worker per hour After b. Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus equipment) as the measure. (Roun your answers to 3 decimal places.) Before 76 carts/dollar cost 82carts/dollar cost After c. Comment on the changes in productivity according to the two measures. (Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. Omit the "%" signs in your response.) fncreasedelectEINE Labor productivity Multifactor productivity by 1 34 381 % 7891 %