Production — Flashcards

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Production is the transformation of inputs into output. The main inputs are land, labour, capital, and entrepreneurship. Goods and services are the output created by combining these factors in the rig…

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Production results from the combined efforts of four factors of production: land, labour, capital, and entrepreneurship. Land gives natural resources, labour provides human effort, capital gives tools…

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Production function tells us the technical relationship between inputs and output of a firm. It tells the maximum quantity of output that can be produced with the help of given quantities of inputs. I…

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Technology or method of production means the ratio in which inputs are combined to produce output. Production function is also described as a technological relationship that tells the maximum output p…

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Labour is called the variable factor because its quantity can be changed. More labour can be employed or fewer workers can be used depending on need. In the chapter, L = 0 means no employment of labou…

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When more labour and less capital are used per unit of output, it is called labour intensive technology. Handloom cloth production and wooden plough with bullocks are examples of this type of technolo…

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When more capital and less labour are used per unit of output, it is called capital intensive technology of production. Powerloom cloth production and the use of tractor, pumpset, and harvester in far…

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Large production units generally use capital intensive technology because they produce on a large scale for sale in the market. Machines and other capital goods help increase output and efficiency whe…