What economic measure indicates how efficiently resources are being used in production?

Productivity is a key economic measure that indicates how efficiently resources are being utilized in the production process. It is defined as the output produced per unit of input, which could refer to labor, capital, or materials. High productivity means that more goods and services are produced with the same amount of resources, signifying efficient use of those resources.

For example, in a factory setting, if a certain amount of labor and machinery produces a larger quantity of goods within the same timeframe, it reflects higher productivity. This efficiency can lead to lower costs of production, higher profits for businesses, and ultimately, potentially lower prices for consumers.

Other concepts, while important, do not specifically measure the efficiency of resource use in production. Standard of living refers to the overall economic well-being of individuals, market power relates to the influence a firm has over the price of goods, and contest doesn't pertain to a recognized economic measurement. Thus, productivity is distinctly linked to resource efficiency in the context of production.