The service sector has lower productivity improvements than the manufacturing sector because:
A) the service sector uses less skilled labor than manufacturing.
B) the quality of output is lower in services than manufacturing.
C) services usually are labor-intensive.
D) service sector productivity is hard to measure.
E) the service sector is often easy to mechanize and automate.

Question

Quizplus · Accepted Answer

Services are typically labor-intensive, meaning that they require a lot of human effort and interaction. This makes it difficult to automate or mechanize many services, leading to lower productivity improvements compared to the manufacturing sector. Additionally, measuring productivity in the service sector can be challenging due to the subjective nature of many services. Thus, option C is the most accurate choice. Option A is not correct, as services often require skilled labor (e.g., doctors, lawyers, accountants). Option B is also incorrect, as quality of output can vary widely between different types of services and cannot be generalized. Option D and E are partially correct, but not as accurate as option C in explaining the lower productivity improvements in the service sector.

The Service Sector Has Lower Productivity Improvements Than the Manufacturing