Final answer:
Productivity increases in the U.S. can't be attributed to a single factor like labor, management, or capital alone, but rather a combination of these elements along with technological advancements and economies of scale.
Step-by-step explanation:
The factor responsible for the largest portion of productivity increase in the U.S. is difficult to pinpoint to a single element, as productivity is influenced by a combination of factors such as labor, management, and capital. However, one significant aspect of productivity improvement is the concept of economies of scale. This economic principle suggests that as a company grows in size, it can gain cost advantages through increased efficiency. For instance, if the productivity difference between workers in different countries was due solely to economies of scale, it may be that one has access to more efficient equipment, such as a larger industrial-size oven compared to a smaller, standard residential size oven used by another. This advantage allows for more goods to be produced in the same amount of time, enhancing labor productivity.
Advancements in technology also play a pivotal role in boosting productivity, as they allow for invention and innovation to be utilized in new products and services. The integration of technological improvements, like the transition from tube technology to transistors, has greatly enhanced the quality and efficiency of electronic devices, contributing to the overall productivity increases. Moreover, an increase in capital allows firms to employ more workers effectively before reaching the point of diminishing returns, indicating how capital investments can impact productivity.