Firm A has a total factor productivity of 10.0 while Firm B has a total factor productivity of 8.0. Therefore, Firm B is the more productive firm and utilizes its resources most efficiently.

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Quizplus · Accepted Answer

Total factor productivity (TFP) measures the efficiency of all inputs to a production process. A higher TFP indicates greater efficiency, so Firm A, with a TFP of 10.0, is more productive and utilizes its resources more efficiently than Firm B, which has a TFP of 8.0.

Firm a Has a Total Factor Productivity of 10