Sign up now
to enroll in courses, follow best educators, interact with the community and track your progress.
5 lessons,
25m 29s
Meaning of Production
740 plays

Meaning of Production

Heena Malhotra
Believe in Conceptual Learning.

Unacademy user
very good. thanks for such good explanation
  1. *Production Creation of Utility

  2. o Input Production Process Output

  3. * Inputs are called Factors of Production which are- Land From these Production takes place. Labour OCapital Entrepreneur- *Factors of Production

  4. Land is Nature's Gift-Include all free goods of nature- broad meaning of land Supply of land is certain and fixed. Land has indestructible power ie, land can not be destroyed. Land can not be shifted to any another place i.e., passive factor. Land has different uses. Land is immobile in nature. Land is an inactive factor of production, it does not produce anything on its own Payments are made in the form of rent. Land

  5. Inelastic(perfectly inelastic) Elastic *From nation's economy's From an individual's point point of view. of view. Elasticity of land -X

  6. DInclude human efforts- physical and mental. Highly perishable in nature- can not be stored Labour(work) is inseparable from labourer (person)- e.g., Capitalist in Bombay and his capital is invested in panipat but labour can not be separable from his work. labourer sells his services and not himself- In the case of land and captial, the factor sells itself to produce a commodity. In case of labour the worker sells his services to produce a commodity. Labour is Mobile in nature. Labour

  7. Active factor of production. Factor payment in form of wages. Derived Demand-Demand of labour is derived from the demand of the product they are making Labourer is a man, not a machine-A Labourer is a human being, who has feelings, laziness etc. play a role in the efficiency of the production process. Difficulty is calculating cost of labour- it 1S not easy to calculate the cost of labour, all the efforts of labour may not lead to production. Some efforts may go waste. Labour

  8. All labourers are not equally efficient. Efficiency of labour depends upon physical strength, skills training, education etc. Efficiency of labour can be improved by proper working conditions and incentives. Labour

  9. Produce means used for further production. Man made/ artificial. (road, building, car, money etc.) Highest mobility. Normally capital means money capital. Factor payment in the form of interest. Capital

  10. OReal capital-physical goods such as building, plant, machinery etc. Human capita come. Eg skills f doctor, teacher. Fixed capital- such capital which is used for long time period. E.g., building, machine etc. It is based on time period. Circulating capital- such capital which is consumed in production process. E.g., raw material, fuel etc. it is based on time period Private capital-owned privately. Known as personal capital. E.g building, car etc. it is based on ownership. social capital- owned by the entire society. e.g., roads, railway I- skills of human being which generate in etc. it is based on ownership. Types of Capital