i. Which farm is more productive according to the productivity measures ii. of agricultural productivity? Why? Which of the three measures is the most informative measure

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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4a

Question 4
a) Consider two farms, A and B. The input use and output are given in the following table. The
wage = $80 per day and rental price of the machines = $100 per day
Farm Labour(L) | Physical
Output(Q) Q/L
Q/K
TFP
capital(K)
A
2
2
200
?
?
?
B
4
1
200
?
?
?
Which farm is more productive according to the productivity measures
i.
ii.
Which of the three measures is the most informative measure
of agricultural productivity? Why?
Transcribed Image Text:Question 4 a) Consider two farms, A and B. The input use and output are given in the following table. The wage = $80 per day and rental price of the machines = $100 per day Farm Labour(L) | Physical Output(Q) Q/L Q/K TFP capital(K) A 2 2 200 ? ? ? B 4 1 200 ? ? ? Which farm is more productive according to the productivity measures i. ii. Which of the three measures is the most informative measure of agricultural productivity? Why?
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