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CMA Foundation · Fundamentals of Business Economics and Management · Means of Production

A workshop with 4 workers, each making whole units alone, produces 40 units per day in total. After dividing the work into specialised tasks, the same 4 workers produce 100 units per day. By what percentage has output increased due to division of labour?

Output has increased by 150 percent. The rise is 100 minus 40, which is 60 units, and dividing by the original output of 40 units gives 1.5, or 150 percent. Using the new output of 100 as the base would wrongly give 60 percent.

  1. A60%
  2. B150%Correct
  3. C250%
  4. D40%

Explanation

Increase = 100 - 40 = 60 units. Percentage increase = 60/40 x 100 = 150%. The 60% option wrongly uses the new output as the base (60/100), while 250% is the ratio 100/40 expressed as a percentage rise.

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