Every country
uses its resources to produce goods and services in order to satisfy the
unlimited wants of its people. These resources are called factors of
production.
Production
Production means
creation of goods and services. In economics, production refers to the output
of goods and services for which people are prepared to pay a price.
Productivity
Productivity is
the relationship between the physical output of a product and the factor inputs
which have gone into producing that output. Therefore; Productivity =
Output/Input
Productivity is
usually measured in terms of output per man hour.
Fore example; In
a 35 hour week, Ali produces 70 tables and Ahmed produces 105 tables. Their
productivity is calculated as follows.
Productivity
[Ali] = 70/35, = 02 tables/hour
Productivity
[Ahmed] = 105/35, = 03
tables/hour
