What is the difference between production and productivity:
- Production is the action of constructing goods or services. It is identified by Inputs (Capital, Land, Labour) and Outputs (The goods and services)
- Productivity refers to the rate of output that can be produced by a fixed input of resources. Firms will try to maximize productivity.
- Primary industry: The firms producing natural resources like planting, farming and mineral digging.
- Secondary industry: The firms that make products from natural resources (They are called manufactures)
- Tertiary industry: The firms that sell goods and services they have not produced. This also includes services.
Graph explanation
As time passes, a country suffers globalization and industralization.
Primary activities will decrease because people will move to the cities, where the tertiary industry will grow as much as to make the secondary sector to decrease. This point is called deindustralization.
Quaternary services such as technology, innovation and research will also start to increase in response to a growth in the demand for competition.
In economics, productivity is the aim for profit of a firm
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