Question

Fill in the blanls:
A firm can determine whether or not it is using its resources efficiently by calculating the value of the ________ for each resource and dividing it by the _______ of that resource. This will tell the firm the ________ of each factor of production. The firm can then decide to increase or decrease its use of each factor of production. When the revenue per dollar spent is ________, the firm will be using its resources in the most efficient manner.

Answer 1

Answer:

1. productivity 2. cost 3. productivity in terms of output per dollars of a resource's unit cost 4. Higher.

Explanation:

Productivity is a formula where the total production is calculated in terms of resources needed to produce it. The variance of this ratio can indicate if a company if used wisely or poorly its resources. In order to make comparisons among different financial ratios, the productivity per resource has to be divided per the total cost of that resource. The value obtained could be then compared, because it is terms of dollars.