Productivity

Question

Productivity

Quizplus · Accepted Answer

Productivity is a measure of efficiency, and it increases when the output generated from a given set of inputs increases. This means that the ratio of output to input (output per unit of input) is higher. Therefore, option C, "Rises when the ratio of output to input increases," is the correct answer. Option A could be confusing because it mentions that productivity rises when the value of output rises relative to the cost of inputs - this is true, but only if the rise in output value is greater than the rise in input cost, which leads to a higher ratio of output to input. Option B is incorrect because it contradicts the definition of productivity, which is a measure of output per unit of input. Option D is partially correct - if factors of production cost more, productivity may fall if output remains constant. However, if output also increases, productivity may still rise.