Firm X has gathered the following financial information for itself and a competing firm, Firm Y: All numbers in 000s. Firm X Firm Y Labor 25 18 Plant & Equipment 200 140 Energy 15 20 Materials 200 160 Sales 1,400 1,000 Assume energy costs increased by 20 percent for both Firm X and Firm Y. Which firm will experience a greater decline in total factor productivity? Answers: Firm Y because Firm Y's energy costs are a greater proportion of total costs than Firm X. Firm X because their energy costs before the increase are smaller than Firm Y. Firm X because Firm Y's energy costs are a greater proportion of total costs than Firm X. Firm Y because their energy costs before the increase are smaller than Firm X. Question 24