Which concept describes the measure of efficiency as output per unit of input?

• A. Capital
• B. Labor
• C. Productivity
• D. Opportunity Cost

Answer: (C)

Productivity is the measure of efficiency as output per unit of input. It captures how effectively resources are turned into goods or services. When productivity is higher, you get more output from the same inputs or the same output from fewer inputs, signaling more efficient production. For example, if a worker produces 40 units in an hour, productivity is 40 units per hour. If improvements raise output to 60 units in the same hour, productivity has increased, showing that inputs are being used more efficiently. The other terms describe the inputs themselves (capital or labor) or the trade-off of forgoing an alternative (opportunity cost) rather than the efficiency ratio itself.