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A consumer product company sets up two manufacturing sites, one in country A and the other in country B. Country A is a newly industrialised
A consumer product company sets up two manufacturing sites, one in country A and the other in country B. Country A is a newly industrialised country, while country B is a developing country. The company collects the following data to evaluate the productivity at each site. Country A Country B Sales (units) 200,000 40,000 Labour (hours) 30,000 20,000 Raw Materials ($) $150,000 $20,000 Equipment (hours) 80,000 5,000 Data can be interpreted as follows: take country A as an example, country A uses 30,000 labour hours, 80,00 equipment hours, and $150,000 worth of raw materials to produce 200,000 units of product Compute the multifactor productivity for labour and equipment together for the two countries. Compare the results of the two countries, what conclusion can you draw? Do you think the conclusion is reasonable, compared to those in (a)
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