Typical
Concept of
Production
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Typical Concept of Production, Slides of Engineering Economy
The concept of production in economics, including the definition of production, factors of production, types of production, and concepts of production. It also covers the effects of production, the role of production in business, and the production function. The document defines land, labor, and capital as the three factors of production and explains their roles in the production process. It also discusses the types of production and the concepts of marginal, total, and average product. Additionally, it covers the negative effects of production on the environment.
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2019/2020
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Typical
Concept of
Production
01 The Definition of Production 02 The Factors of Production 03 The Types of Production 04 The Concepts of Production
Objectives
At the end of this lesson, you will learn about: 05 The Effects of Production 06 The Function of Production
Pizza Making Creating Furnitures Shoe Making EXAMPLES
LAND (^) CAPITAL ENTREPRENEURSHIP LABOR TECHNOLOGY Factors of Production
Factors of Production Capital Economists use the term Capital to mean physical capital i.e. the machines, equipment, and buildings that one uses to produce the product. 33 Capital: (Pizza – making example) Peel Oven Building Other necessary equipment such as chairs and tables
Factors of Production Technology Refers to the process or processes for producing the product. 44 (Pizza – making example) How does the pizzaiolo combine ingredients to make pizza? How hot should the oven be? How long should it take for the pizza to be cooked? What is the best oven to use? Gas or Wood-burning? Should the restaurant make its own dough, sauce, cheese, toppings, or should it buy them?
The cost of producing pizza (or any output) depends on the amount of labor, capital, raw materials, and other inputs required and the price of each input to the entrepreneur.
01 Production Primary 02 Production Secondary 03 Production Tertiary Types of Production in Economics
It involves all stages that the good passes through after extraction to manufacturing Secondary Production
Tertiary Production Concerned with the provision of commercial and professional services to the people.
It is the average cost per unit produced per set of resources
Average Product
It is the total amount produced per a set of resources
Total Product
Concepts of Production
It is the cost for the very next unit to be produced in resources. In other ways, marginal product leads to an increase of total product with the help of additional workers or input.
Marginal Product
Concepts of Production
It provides employment It allows natural resources to be transformed into finished products It generates revenue for government Positive Effects of Production
It can contribute to the depletion of the ozone layer It can lead to global warming as a result of trees cut down for farming or housing It leads to the pollution of the environme nt Negative Effects of Productio