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22 September, 14:56

A company has employed two workers A and B whose productivities are 20units and 15units respectively. The wage for A is k12 whilst B's is k8. Are these two employees optimally employed?

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  1. 22 September, 15:02
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    No they are not optimally employed

    Explanation:

    When comparing two employees to see if they are optimally employed we will look at the ratio of their productivity and the ratio of their wages.

    Ideally the ratio of their wages should be above the ratio of their productivity for them to be optimally employed.

    Productivity ratio of A and B = 15 : 20 = 0.75

    Wage ratio of A and B = 8 : 12 = 0.6666

    Wage ratio is less than productivity ratio so the employees are not optimally employed.
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