Suppose that real domestic output in an economy is 20 units,the quantity of inputs is 10,and the price of each input is $4.Answer the following question on the basis of this information. Refer to the information.All else being equal,if the price of each input increased from $4 to $6,productivity would:
A) fall from 2 to 3.
B) fall from .50 to .33.
C) rise from 1 to 2.
D) remain unchanged.

Question

Quizplus · Accepted Answer

Productivity is calculated as the ratio of output to input quantity. Since the output and input quantity remain unchanged, productivity remains unchanged regardless of the input price change.

Suppose That Real Domestic Output in an Economy Is 20