Final answer:
Productivity is measured by the total value of outputs produced divided by the total value of inputs used in production, not the other way round. It is output per unit of input, often exemplified by GDP per worker.
Step-by-step explanation:
The statement that productivity is the total value of all inputs to the transformation process divided by the total value of the outputs produced is false. Instead, productivity measures the efficiency of a production process and is calculated by dividing the total value of the outputs produced by the total value of inputs used during the transformation process. In other words, it is output per unit of input, which can be exemplified using GDP (output) per worker (input) as a measure. The production function is a mathematical representation of the relationship between inputs, like labor, machinery, and raw materials, and the outputs, being goods or services provided by a firm.
For example, in the production process for making pizza, the inputs (or factors of production) include flour, water, yeast (to make dough), tomatoes, spices, water (to make pizza sauce), labor (pizzaiolo and cook), and capital (like the oven and pizza peel). The output is the finished pizza that customers pay for