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A farmer grows two crops: lettuce and beans. The farmer uses three inputs: labor, seed and fertilizer. The past prices and the quantities of each are given in the following tables:
Physical Quantities
Past Last This
Inputs/outputs: Prices Year Year
Outputs:
Lettuce $1500/ton 500 tons 600 tons
Beans $1300/ton 200 tons 100 tons
Inputs:
Labor $10/hour 1000 hrs 1200 hrs
Seeds $12/pound 300lbs 320 lbs
Fertilizer $500/ton 10 tons 12 tons
Required:
a) Calculate productivity measures for last year and this year using past prices.
b) Calculate the percentage change in productivity.
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