Hello Show your work Please round all reliability answers to

Hello,

Show your work! (Please round all reliability answers to four decimal places, e.g., 0.1234 or 12.34%) • (5 points) If outputs decrease by 25% and inputs increase by 45%, what is the percentage change in productivity?

Solution

Let us begin with X as the input and Y as the output then Productivity, ratio between output and input or output per unit of input is Y/X

If outputs decrease by 25% then new level of output is Y(1-.25) = .75Y

If inputs increase by 45% then new level of input is X(1+.45) = 1.45X

Therefore new Productivity = .75Y/1.45X = (.75/1.45) (Y/X) = .5172413 (Y/X) = (1-.4827587) (Y/X)

Therefore Productivity decreased by 48.27587% or 48.2759% precision upto four decimal places.