Brigid Boats is a manufacturer of customized sailboats. In 2013, the company produced 74 boats, in 2014 it built 81 boats, and in 2015 it built 79 boats. The company's cost of labor was $575,000 in 2013, $600,000 in 2014, and $610,000 in 2015. What direction did Brigid's productivity growth rate change from 2013 to 2014 and then from 2014 to 2015?

Question

Quizplus · Accepted Answer

To determine productivity growth rate, we need to compare the number of boats produced per year to the cost of labor for that year.

Productivity Growth Rate in 2013 = (74 boats) / ($575,000 cost of labor) ≈ 0.1287 
Productivity Growth Rate in 2014 = (81 boats) / ($600,000 cost of labor) ≈ 0.1350 
Productivity Growth Rate in 2015 = (79 boats) / ($610,000 cost of labor) ≈ 0.1295

From 2013 to 2014, productivity growth rate increased. From 2014 to 2015, productivity growth rate decreased. Therefore, the best choice is C, Increase and then decrease.

Brigid Boats Is a Manufacturer of Customized Sailboats