91Ó°ÊÓ

Productivity is measured by dividing the input by output. The higher the result, the higher the productivity

$\begin{array}{rcl}\text{Labor} \text{productivity} \text{of} \text{U.S}& =& \frac{\text{Output}}{\text{Input} \text{in} \text{hours}}\\ & =& \frac{100000}{20000}\\ & =& 5 \text{units} \text{per} \text{hour}\\ \text{Labor} \text{productivity} \text{of} \text{LDC}& =& \frac{\text{Output}}{\text{Input} \text{in} \text{hours}}\\ & =& \frac{20000}{15000}\\ & =& 1.33 \text{units} \text{per} \text{hour}\\ & & \end{array}$

$\begin{array}{rcl}\text{Capital} \text{productivity} \text{of} \text{U.S}& =& \frac{\text{Output}}{\text{Input} \text{in} \text{hours}}\\ & =& \frac{100000}{60000}\\ & =& 1.67 \text{units} \text{per} \text{hour}\\ \backslash \text{Capital} \text{productivity} \text{of} \text{LDC}& =& \frac{\text{Output}}{\text{Input} \text{in} \text{hours}}\\ & =& \frac{20000}{5000}\\ & =& 4 \text{units} \text{per} \text{hour}\\ & & \end{array}$

Yes, labor productivity is higher in the U.S., but capital productivity is lower. The measure seems to contradict.

When productivity is measured by combining various inputs, and the result is used for diving output, it is known as multifactor productivity.

$\begin{array}{rcl}\text{Multifactor} \text{productivity} \text{for} \text{U.S}& =& \frac{\text{Output}}{\text{Raw} \text{material + Capital} \text{equipments}}\\ & =& \frac{100000}{20000+60000}\\ & =& \frac{100000}{80000}\\ & =& 1.25 \text{units} \text{per} \text{hour}\\ \text{Multifactor} \text{productivity} \text{for} \text{LDC}& =& \frac{\text{Output}}{\text{Raw} \text{material + Capital} \text{equipment}}\\ & =& \frac{20000}{15000+5000}\\ & =& \frac{20000}{20000}\\ & =& 1 \text{unit} \text{per} \text{hour}\\ & & \end{array}$

Yes, multifactor productivity is much better as labor and equipment can be substituted for each other.

Given: that $1 is equal to FC 10

$\begin{array}{rcl}\text{Raw} \text{material} \text{productivity} \text{of} \text{U.S}& =& \frac{\text{Output}}{\text{Input} \text{in} \text{dollars}}\\ & =& \frac{100000}{20000}\\ & =& 5 \text{units} \text{per} \text{dollar}\\ \text{Raw} \text{material} \text{productivity} \text{of} \text{LDC}& =& \frac{\text{Output}}{\text{Input} \text{in} \text{dollars}}\\ & =& \frac{20000}{2000}\\ & =& 10 \text{units} \text{per} \text{dollar}\\ & & \end{array}$

The raw material productivity will be higher for subsidiaries because the cost of raw materials is low in LCD, which increases productivity.