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Economics · May / June 2024 · Paper 11 · Question 12

2281Firms and production

A farmer introduces machinery to help workers at harvest time. The farmer also reduces the number of workers by 50%. As a result, the total harvest increases by 25%. What has happened?

  1. ALabour productivity has decreased and production has decreased.
  2. BLabour productivity has decreased and production has increased.
  3. CLabour productivity has increased and production has decreased.
  4. DLabour productivity has increased and production has increased.

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Correct answer: D. Labour productivity has increased and production has increased.

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