Question

Suppose that real domestic output in an economy is 20 units, the quantity of inputs is 10, and the price of each input is $4. 1. The level of productivity is

A. 20.
B. 10.
C.5.
D. 2.

Answer 1

Productivity is calculated by dividing the total output by the number of inputs, which in this scenario results in a productivity level of 2.

Step-by-step explanation:

The level of productivity is calculated as the output per unit of input. In this scenario, real domestic output is 20 units and the quantity of inputs is 10. Therefore, productivity is calculated by dividing the total output by the number of inputs, which gives us a productivity level of 2 (20 units / 10 inputs). The correct answer is D. 2.