Question: A U. S. manufacturing company operating a subsidiary in an LDC ( less- developed country) shows the following results: a. Calculate partial labor and capital

A U. S. manufacturing company operating a subsidiary in an LDC ( less- developed country) shows the following results:

a. Calculate partial labor and capital productivity figures for the parent and subsidiary. Do the results seem confusing?
b. Compute the multifactor productivity figures for labor and capital together. Do the results make more sense?
c. Calculate raw material productivity figures (units/$ where $1 = FC 10). Explain why these figures might be greater in thesubsidiary.

US LDC Sales (units) Labor (hours) Raw materials (currency) Capital equipment (hours) 100,000 20,000 $20,000 60,000 20,000 15,000 FC 20,000 5,000

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