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Brown's, a local bakery, invested $5000 to upgrade the oven at the beginning of this year. Thus, the cost of capital increased from $15,000 to

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Brown's, a local bakery, invested $5000 to upgrade the oven at the beginning of this year. Thus, the cost of capital increased from $15,000 to $20,000. The oven manufacture told Brown's that the upgrade would make the oven 25% more efficient (increase marginal factor productivity). Use the data below to verify the manufacture's claim and calculate individual input productivities. Assume the cost of labor is $30 per hour. Use this information and the information in the table to answer the quiz questions. Last year This Year Production (dozen 1,650 loaves per 2,100 unit) Labor hours 550 350 What is the level of labor productivity prior to the increase in capital spending? 04 O 3 O 3.6 O 5 Question 2 What is the level of labor productivity after the increase in capital spending? O 6 07 O 5 04

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