1.9 David Upton is president of Upton Manufacturing, a producer of Go-Kart tires.

Upton makes 1,000 tires per day

Labor: 400 hours per day @ $12.50 per hour

Raw material: 20,000 pounds per day @ $1 per pound
Energy: $5,000 per day
Capital costs: $10,000 per day

a) What is the labor productivity per labor-hour for these tires at Upton Manufacturing?
TOTAL LABOUR COST = 5000 $
400 HOURS PRODUCES 1000 TYRES
1 HOUR PRODUCES 2.5 TYRES

b) What is the multifactor productivity for these tires at Upton Manufacturing?

5000 $ OF LABOUR + 20000 $ ON RAW MATERIAL + 5000 $ ON ENERGY + 100000 $ ON CAPITAL COS
PRODUCTION OF 1000 TYRES / DAY NEEDS 40000 $

PRODUCTIVITY / TYRE = 40 $

c) What is the percent change in multifactor productivity if Upton can reduce the energy bill by $1,000 per day with

2.5 %
n makes 1,000 tires per day with the following resources:

100000 $ ON CAPITAL COST = 40000 $

bill by $1,000 per day without cutting production or changing any other inputs?