Production

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III - ACSAD Economics Report

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Production

  1. 1. PRODUCTION
  2. 2. What is Production? Production is the creation of goods and services to satisfy human wants.
  3. 3. 2 KINDS OF GOODS- free goods- economic goods complimentary goods substitute goods
  4. 4. Factors of ProductionLAND - is an original giftfrom nature.LABOR – is an exertion ofphysical and mental effortsof individuals.
  5. 5. CAPITAL – is a finishedproduct which is used oother goods.ENTREPRENEUR – is theorganizer and coordinatorof the land, labor andcapital.
  6. 6. entrepreneur = profitlaborers = wageslandlords = rents
  7. 7. Factor of Production is also called inputs of production.Outputs of Production - goods and services that has been created by the inputs.
  8. 8. Fixed Factor- A fixed factor/fixed inputremains constantregardless of the volume ofproduction.
  9. 9. Variable Factor- Variable factor/variableinput changes inaccordance with volume ofproduction.
  10. 10. Theory of Production - is the process of transforming both fixed and variable inputs into finished goods and services.

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