Question

If inputs increase by 30% and outputs increase by 15%, what is the percentage change in productivity? A. 88.46% increase B. 88.46% decrease C. 11.54% decrease D. 50.00% decrease E. 11.54% increase

Answer 1

Answer:

C. 11.54% decrease

Explanation:

Productivity is a parameter that measures number of outputs per unit of input. Assume that rhe original productivity was 100%, the new productivity after the changes in input and output is:

$P_{new} = \frac{100\%+15\%}{100\%+30\%}=88.46\%$

The change in productivity is:

$\Delta P=P_{new} - P_{old} = 88.46\%-100\%\\ \Delta P =-11.54\%$

There is an 11.54% decrease.