Total factor productivity will increase if ________.
A) technical productivity occurs
B) the company uses more total inputs per output
C) the company incurs fewer costs per input
D) current technology becomes obsolete

Question

Quizplus · Accepted Answer

Total factor productivity refers to the efficiency with which inputs (such as labor and capital) are turned into outputs. Technical productivity, which refers to the development and use of new technologies and methods, can lead to increased efficiency and thus higher total factor productivity. Therefore, choice A is the correct answer. Choices B and C are both incorrect, as they would likely result in lower total factor productivity. Choice D may or may not lead to increased productivity, depending on the nature of the new technology that replaces the old.

Total Factor Productivity Will Increase If ________