Productivity

The difference between production and productivity.

This is very important and often confused by students. Production is the total output of goods and services and productivity is the output per unit of FOP. So we measure Labour productivity by dividing the total output produced by the number of workers. What is happening to production and productivity in the following example? in 2007 company X is producing 200 units with 10 workers. However due to the economic crisis by 2009 output has fallen to 150 units and they only have 5 workers left.

 