Which of the Following Statements About Productivity Is True

question 50

Multiple Choice

Which of the following statements about productivity is true?

• A) Productivity is a ratio of benefits to costs (i.e., benefits divided by costs).
• B) For companies, higher productivity can lead to lower costs.
• C) For countries, higher productivity produces a lower standard of living.
• D) Productivity decreases make products more affordable.
• E) All of the statements about productivity are true.

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Definitions:

Equity Capital

The amount of money that is invested in a company by its owners, in exchange for ownership interest or shares.

Economic Profit

The surplus remaining after deducting total costs from total revenues, including both explicit and implicit costs, and representing a measure of economic efficiency.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Accounting Profit

The total revenue of a business minus the explicit costs, representing the financial gain on its income statement.