Final answer:
Labor productivity is defined as the output per worker, representing how efficiently a nation uses its time and workers. It is key to long-term economic growth and directly influences the average wage levels.
Correct option is B) Output per worker
Step-by-step explanation:
The best definition of labor productivity is output per worker. This measures the value that each employed person creates per unit of their input. For example, if we imagine a worker in Canada able to make 10 loaves of bread in an hour versus a worker in the U.S. who can make only two loaves in the same time frame, we would say that the Canadian worker is more productive. Higher productivity means more can be done in the same amount of time, leading to greater economic efficiency and the potential for higher wages.
Besides the amount produced per hour, productivity can be measured in terms of the value of goods and services produced per unit of labor input. This could take into account the quality and innovation in products, not just the quantity.
Furthermore, productivity growth influences the average level of wages within an economy. Generally, if workers are more productive, they help generate higher profits and, thus, can be paid higher wages. Conversely, if productivity is low, it can lead to lower wages or even losses for employers.