A company that makes shopping carts for supermarkets and otherstores recently purchased some new equipment that reduces the laborcontent of the jobs needed to produce the shopping carts. Prior tobuying the new equipment, the company used 7 workers, who togetherproduced an average of 90 carts per hour. Workers receive $18 perhour, and machine cost was $40 per hour. With the new equipment, itwas possible to transfer one of the workers to another department,and equipment cost increased by $11 per hour while output increasedby 5 carts per hour.
a. Compute labor productivity under each system. Use cartsper worker per hour as the measure of labor productivity.(Round your answers to 3 decimal places.)
| Before | | | carts per worker per hour |
| After | | | carts per worker per hour |
b. Compute the multifactor productivity under eachsystem. Use carts per dollar cost (labor plus equipment) as themeasure. (Round your answers to 3 decimalplaces.)
| Before | | | carts/dollar cost |
| After | | | carts/dollar cost |
c. Comment on the changes in productivityaccording to the two measures. Round your intermediatecalculations to 3 decimal places and final answers to 2 decimalplaces.
| Labor productivity | (Click toselect) decreased increased by % |
| Multifactor productivity | (Click toselect) increased decreased by % |
