Question

Suppose you observe two workers, one is clearly more productive than the other and you wonder why.

Group of answer choices

Having more capital could explain the productivity differences

The more productive worker could have access to more natural resources or raw materials.

The more productive worker may have more skills.

All of these answers

Answer 1

Answer: The correct answer is the third option i.e. the kore productive worker may have more skills.

Explanation: The first option is not true because even if the worker has high amounts of capital to work with, it's not necessary that the productivity of the worker will be high. Productivity basically measures the efficiency of the worker to work with the capital that is available. A worker can have higher productivity even with low level of capital given that he is more skilled. It is the level of skills that determines the efficiency of the worker and hence the level of productivity. Having access to more natural resources doesn't mean that the productivity will be high because how to efficiently use these natural resources depends on the level of skills of the worker. So the correct answer is option C.