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Productivity in economics is usually measured as the ratio of what is produced (an aggregate output) to what is used in producing it (an aggregate input). [1] Productivity is closely related to the measure of production efficiency. A productivity model is a measurement method
Wire-grid Cobb–Douglas production surface with isoquants A two-input Cobb–Douglas production function with isoquants. In economics and econometrics, the Cobb–Douglas production function is a particular functional form of the production function, widely used to represent the technological relationship between the amounts of two or more inputs (particularly physical capital and labor) and ...
[citation needed] R&D intensity has been defined as "the ratio of expenditures by a firm on research and development to the firm's sales." [ 4 ] William Leonard has described research intensity as "measured usually by ratios of scientific personnel to total employment or by R&D expenditures/sales" to gains in such variables as productivity ...
The main reason for the increasing returns to scale is the increase in production efficiency due to the expansion of the firm's production scale. A firm's production function could exhibit different types of returns to scale in different ranges of output.
Data envelopment analysis (DEA) is a nonparametric method in operations research and economics for the estimation of production frontiers. [1] DEA has been applied in a large range of fields including international banking, economic sustainability, police department operations, and logistical applications [2] [3] [4] Additionally, DEA has been used to assess the performance of natural language ...
An explanation of the difference between efficiency and (total factor) productivity is found in "An Introduction to Efficiency and Productivity Analysis". [1] To complicate the meaning, operational excellence , which is about continuous improvement, not limited to efficiency, is occasionally used when meaning operational efficiency.
In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: [1] Allocative or Pareto efficiency : any changes made to assist one person would harm another.
In economics, total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs. [1] Under some simplifying assumptions about the production technology, growth in TFP becomes the portion of growth in output not explained by growth in traditionally ...