# Calculate the labor productivity of both Archer Contracting and Bronson Construction.

Archer Contracting repaved 50 miles of two-lane county roadway with a crew of six employees. This crew worked 8 days and used \$7,000 worth of paving material. Nearby, Bronson Construction repaved 30 miles of four-lane interstate roadway working 10 days with a crew of five people using \$9,000 of paving material. Both Archer Contracting and Bronson Construction rented the same paving equipment to complete their respective assignments, costing each \$1, 500 a day. Calculate the labor productivity of both Archer Contracting and Bronson Construction. Who is the most productive according to this measure? Assume that both Archer Contracting and Bronson Construction pay their employees \$15 an hour and each employee works 8 hours per day. Calculate the multifactor productivity of each firm. Now who is the most productive and by how much? Now assume that both Archer Contracting and Bronson Construction pay their employees \$35 an hour and each employee works 8 hours per day. Calculate the multifactor productivity of each firm. Now who is the most productive and by how much? Why does the conclusion concerning who is the most productive differ when employees receive \$15 an hour (part b) versus \$35 an hour (part c)?

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