Final answer:
The three common productivity variables are labor, capital, and management. Capital goods such as equipment enhance productivity, and economies of scale provide cost advantages. The synergy of human capital, physical capital, and technology is crucial for increasing productivity.
Step-by-step explanation:
Three commonly used productivity variables include labor, capital, and management. Productivity involves how efficiently inputs like labor and materials are converted into outputs or services.
For instance, capital, which includes the tools and equipment used for production, plays a significant role in improving productivity, as it can amplify the output produced by workers.
Economies of scale, as another example, highlight the cost advantages that emerge from the increased scale of operation, allowing more efficient use of capital goods such as industrial-sized ovens compared to smaller-scale equipment.
Moreover, the interaction between human capital, physical capital, and technology is essential for economic growth and productivity. Workers with higher education and skills can innovate technologically, which when paired with investments in physical capital, lead to more efficient production processes.
The economy benefits from this amalgamation, driving up productivity and fostering economic growth.