Concept Of Production And Production Function — Flashcards

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Production is a process in which some materials are transformed from one form to other. It also means creation of utility by changing the form or location of a commodity. For example, a carpenter conv…

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Production refers to the entire process by which inputs are converted into output. Output is the end result of the production process. For example, all the operations involved in growing wheat are pro…

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The person who creates utility is called a producer. A producer combines inputs like land, labour, capital, raw materials, and machinery to produce goods and services.

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The cost paid by producer to acquire inputs is called cost of production. It includes the payment made for land, labour, capital, and other required factors of production.

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The four basic factors of production are land, labour, capital and entrepreneurship. These are the main resources used to produce goods and services.

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A production function is the functional relationship between physical inputs and physical output of a firm. It is written as Q = f(F1, F2, F3, ... FN). It is a purely physical-technical relation and d…

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The general formula is Q = f(F1, F2, F3, ... FN). Here, Q means quantity of a commodity, and F1, F2, ... FN mean different factor inputs.

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If 20 chairs are produced using 10 units of capital and 5 units of labour, the production function can be written as 20Q = 5L + 10K. It shows the physical relationship between inputs and output, not t…