1. Which of the following statements is true about productivity measures? a. A m
ID: 2526972 • Letter: 1
Question
1. Which of the following statements is true about productivity measures?
a. A major disadvantage of total factor productivity is that it measures the combined productivity of all inputs to produce output.
b. Partial productivity and total factor productivity measures work best together because the strengths of one are the weaknesses of the other.
c. Total factor productivity is calculated by dividing the costs of all inputs used by the quantity of output produced.
d. The higher the inputs for a given quantity of outputs or the lower the outputs for a given quantity of inputs, the higher the level of productivity.
Explanation / Answer
The right option is “C”.
Total factor productivity is calculated by dividing the costs of all inputs used by the quantity of output produced.
Reason: A productivity measure is expressed as the ratio of output to inputs used in a production process, i.e. output per unit of input.
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