Productivity

• what is productivity?


  firms level of output is the total amount it produces
• waht does productivity measure?

  output prodcued in relation to the inputs factors of production it has used in a given time period
• what do different measures of productivity include?

  labour productivity=output per worker hour

  capital productivity= output per machine hour
• what is labour productivity?

  measures the output of the firm in relation to the number of workers employed
• what is the labour productivity formulas?

  output per time period/ number of workers
• how does productivity effect unit costs?

  if labour productivity rises then each worker is producing more units in a given time period, if wages remain the same then the labour costs per unit should be lower. as the amount of labour needed to produce each product has fallen
• what is unit labout cost?


  cost of labor per unit of output
• how to calculate unit labour cost?

  total labour cost/ units produced
• how can productivity be improved in a business?

  using fewer inputs to achieve the same level of output

  increasing output using the same number of inputs
• why is it difficult to improve productivity?

  might lead to poorer quality, employees might resist the changes due to concerns about redundancies, employees might demand higher pay as a reward for improvements in output