Review Ch1

Productivity increases when

• inputs increase while outputs remain the same

• inputs decrease while outputs remain the same

• outputs decrease while inputs remain the same

• inputs and outputs increase proportionately

Services often

• are tangible.

• are standardized.

• are knowledge based

• are low in customer interaction.

Productivity

• can use many factors as the numerator

• is the same thing as production

• increases at about 0.5% per year.

• is dependent upon labor, management, and capital

Single factor productivity:

• remains constant.

• is never constant.

• usually uses labor as a factor.

• seldom uses labor as a factor

Multifactor productivity:

• remains constant.

• is never constant.

• usually uses substitutes as common variables for the factors of production.

• seldom uses labor as a factor.

productivity increases each year in the USA are a result of three factors

• labor, capital, management

• engineering, labor, capital

• engineering, capital, quality control

• engineering, labor, data processing