Goldstein company manufactures wallets from fabric in 2013 , goldstein made 2730

Question

Goldstein company manufactures wallets from fabric in 2013 , goldstein made 2730,000 wallets using 1750000 yards of fabric in 2011 Gerhart has capcity to make 3270,000 wallets and incurs a cost of 9810000 for this capacity in 2014 Goldstein plans to make 2975700 wallets make fabric use more effiecient and reduce capacity

Suppose that in 2014 Goldstein makes 2975700 wallets , uses 1983800 yards of fabric and reduces capacity to 2834000 units and costs of 9635600 assume the fabric costs 4.40 per yard in 2014 and 4.55 per yard in 2013

Computer goldstein companys total factor productivity for 2014

Compare TFP for 2014 with a benchmark TFP for 2013 inputs based on 2014 prices and out put

what additional information does TFP provide that partial productivity measures do not ?

Explanation / Answer

Calculation of Total Factor Productivity:

Yard used = 1983800

Wallets prepared = 2975700

Productivity Per Yard =2975700 / 1983800 = 1.5

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