1. (8 points) Archer Contracting repaved 60 miles of two-lane county roadway with a crew of five employees. This crew worked 5 days and used $10,000 worth of paving material. Nearby, Bronson Contracting repaved 32 miles of four-lane interstate roadway working 8 days with a crew of four people using $4,000 of paving material. Both Archer Contracting and Bronson contracting rented the same paving equipment to complete their respective assignments, costing each $2,000 a day.

a. Calculate the labor productivity of both Archer and Bronson contracting. Who is the most productive according to this measure? (miles of lane per employee day)

b. Assume that both Archer and Bronson Contracting pay their employees $15 an hour and each employee works 8 hours per day. Calculate the multifactor productivity of each firm. Now who is the most productive and by how much? (miles of lane per $)

c. Now assume that both Archer and Bronson contracting pay their employees $40 an hour and each employee works 8 hours per day. Calculate the multifactor productivity of each firm. Now who is the most productive and by how much? (miles of lane per $)

d. Why does the conclusion concerning who is the most productive differ when employees receive $15 an hour (part b) versus $40 an hour (part c)?