Which scenario describes the highest level of productivity

Which scenario describes the highest level of productivity?

A. ?Producing 50 ?shoes using resources that cost $25

B. ?Producing 100 ?shoes using resources that cost $100

C. ?Producing 25 ?shoes using resources that cost $50

D. ?Producing 50 ?shoes using resources that cost $50

The correct answer and explanation is:

Correct Answer: A. Producing 50 shoes using resources that cost $25

Explanation:

Productivity measures how efficiently resources are used to produce goods or services. In economic terms, it’s often expressed as output per unit of input. To determine the highest level of productivity, we need to calculate the cost per shoe (output per dollar of resource input) for each scenario. Here’s how the productivity is calculated:

1. Scenario A:
   • Output: 50 shoes
   • Resource cost: $25
   • Productivity = Output / Cost = 50 shoes / $25 = 2 shoes per dollar
2. Scenario B:
   • Output: 100 shoes
   • Resource cost: $100
   • Productivity = Output / Cost = 100 shoes / $100 = 1 shoe per dollar
3. Scenario C:
   • Output: 25 shoes
   • Resource cost: $50
   • Productivity = Output / Cost = 25 shoes / $50 = 0.5 shoes per dollar
4. Scenario D:
   • Output: 50 shoes
   • Resource cost: $50
   • Productivity = Output / Cost = 50 shoes / $50 = 1 shoe per dollar

Among these scenarios, Scenario A has the highest productivity, producing 2 shoes per dollar spent on resources. This demonstrates the most efficient use of resources, achieving greater output at a lower cost compared to other scenarios.

This level of productivity is desirable in economics and business because it maximizes the use of available inputs, leading to higher profitability and competitiveness. Efficient resource utilization allows businesses to allocate savings toward other growth opportunities, such as innovation, marketing, or expansion. Lower costs also enable businesses to offer competitive pricing, benefiting consumers while ensuring sustainability.