Which of the following formulas best illustrates productivity in the context of marginal analysis?

• A. Productivity = Marginal Cost / Marginal Revenue
• B. Productivity = Input / Output
• C. Productivity = Total Cost / Output
• D. Productivity = Output / Input

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the concept of productivity in microeconomics. Productivity measures how efficiently inputs are converted into outputs. It is generally expressed as the ratio of output produced to the input used.
2. Step 2: Review the given formulas and identify what each represents. For example, Marginal Cost / Marginal Revenue relates to profit maximization, Total Cost / Output relates to average cost, and Input / Output is the inverse of productivity.
3. Step 3: Recall that productivity is defined as the amount of output produced per unit of input, which can be mathematically expressed as \( Productivity = \frac{Output}{Input} \).
4. Step 4: Recognize that the formula \( Productivity = \frac{Output}{Input} \) directly measures efficiency, showing how much output is generated from each unit of input, which aligns with the concept of productivity in marginal analysis.
5. Step 5: Conclude that among the options, the formula \( Productivity = \frac{Output}{Input} \) best illustrates productivity in the context of marginal analysis.