In a firm, if the employees attend a training program, then the time to assemble one unit reduces by 10%. Training program will
A. increase the labor productivity only
B. increase the multifactor productivity only
C. increase both labor and multifactor productivity
D. decrease capital productivity
E. have no effect on productivity.

Question

In a firm, if the employees attend a training program, then the time to assemble one unit reduces by 10%. Training program will 
A. increase the labor productivity only
B. increase the multifactor productivity only
C. increase both labor and multifactor productivity
D. decrease capital productivity
E. have no effect on productivity.

Quizplus · Accepted Answer

The training program reduces the time to assemble a unit, which increases labor productivity. Since it improves efficiency without increasing inputs, it also enhances multifactor productivity.

In a Firm, If the Employees Attend a Training Program