Guble Company manufactures wallets from fabric. In $2021,$ Guble made $2,350,000$ wallets using $1,975,000$ metres of fabric. In $2022,$ Guble plans to make $2,209,000$ wallets and wants to make fabric use more efficient. At the same time, Guble wants to reduce capacity; capacity in $2021$ was $2,800,000$ wallets at a total cost of $$8,400,000.$ Guble wants to reduce capacity to $2,650,000$ wallets, at a total cost of $$8,215,000$ in $2022.$

Suppose that in $2022$ Guble makes $2,209,000$ wallets, uses $1,658,000$ metres of fabric, and reduces capacity to $2,650,000$ units and costs to $$8,215,000.$ And the fabric costs $$4\mathrm{.}1$ per metre in $2022$ and $$4\mathrm{.}2$ per metre in $2021.$

Required: $($do not round the interim calculation but round your answers to $4$ decimal places$)$

$1.$ Compute Guble Company's total factor productivitiy $($TFP$)$ for $2022.$

$2.$ Compare TFP for $2022$ with a benchmark TFP for $2021$ inputs based on $2022$ output.

Answer:

$1.$

Answer

$\mathrm{.}2667$

units of output per dollar of input $=$ Answer

$2209000$

wallets

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$Answer

$15,018,800$

$2.$

$Answer

$16\mathrm{.}197$

$=$ $ Answer

$779790$

$/$ Answer

$1856500$

The inputs that would have been used in $2021$ to produce year $2022$s $2,209,000$ units of output assuming the year $2021$ relationship between inputs and outputs are:

Direct materials $=1,975,000$ metres x Answer

$/$ Answer

$=1,856,500$ metres

Manufacturing capacity $=$ Answer

units of capacity, because manufacturing capacity is

fixed, and adequate capacity existed in $2021$ to produce year $2022$

output.

Answer

units of output per dollar of input $=$ Answer

wallets

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$Answer

Using year $2022$ prices, total factor productivity increased Answer

$\%$ from $202$