Production and Productivity:

Production: to produce goods and services to satisfy human wants and for which people are prepared to pay a price.

Productivity: It is the efficiency with which goods and services are produced.

Productivity = Output / Input

Labour Productivity = Output / Labour hours

For example: Ahmed and Mohammed are carpenters. In a 40 hour of work in a week, Ahmed makes 40 tables and Mohammed makes 80 tables.

Labour Productivity for Ahmed = 40 / 40 = 1   (i.e. One table per hour)

Labour Productivity for Mohammed = 80 / 40 = 2   (i.e. Two table per hour)

Therefore Productivity of Mohammed is higher than Ahmed.