In a firm, all other things remaining the same, if the material usage per unit of final product decreases to half of the current usage, then the firm will
A)double the material productivity
B)increase the multifactor productivity
C)both A and B
D)decrease capital productivity
E)have no effect on productivity.

Question

Quizplus · Accepted Answer

If the material usage per unit of final product decreases to half of the current usage, then the firm will double the material productivity (A) because it is using less material to produce the same amount of output.

Additionally, the multifactor productivity (B) will increase because the same amount of output is being produced with less material input, leading to an overall increase in productivity of the factors of production.

Therefore, the correct answer is C- both A and B.

In a Firm, All Other Things Remaining the Same, If