A problem associated with total factor productivity is that:
A) it is a useful tool to measure efficiency.
B) managers find the calculation too simple.
C) it converts all factors into simple factors.
D) it is too precise in converting an input to an output.
E) each input is typically measured in different units.

Question

Quizplus · Accepted Answer

The problem with total factor productivity is that each input is typically measured in different units.To compute total factor productivity,managers must convert all the inputs to a common unit,such as dollars,before they can work the equation.It also obscures the exact contribution of an individual input-such as labor-to the production of a given output.

A Problem Associated with Total Factor Productivity Is That