If the employees of a firm attend a training program, then the time to assemble one unit is reduced by 10%. The training program will
A) increase the labor productivity only.
B) increase the multifactor productivity only.
C) increase both labor and multifactor productivity.
D) decrease capital productivity.
E) have no effect on productivity.

Question

Quizplus · Accepted Answer

The training program has led to a reduction in the time to assemble one unit by 10%, which means the labor productivity has increased. In addition to this, the multifactor productivity must have also increased because the same output is being obtained using lesser input. Thus, both labor and multifactor productivity have increased as a result of the training program.

If the Employees of a Firm Attend a Training Program