Production
From Economypedia.com
The process of transformation of inputs into productive outputs is referred to as production. Production process involves conversion of resources or factors of production into goods and services.
Contents |
[edit] Resources of production
Resources used in the process of production can be of single type or a combination of several resources. The major types of resources used in production include:
[edit] Natural resources
Resources that are supplied directly by nature are categorized under natural resources. These resources are generally supplied by the primary sector and mainly include raw materials. Some of these resources are renewable. The non renewable resources can also be used by recycling.
[edit] Capital resources
These resources are mainly supplied by the secondary sector. These are generally man-made resources that can be used in the manufacturing of other types of products. These resources can also be used in making final goods. Capital resources are significant in the process of production as deficiency of these resources can lead to inadequate supply.
[edit] Human resources
Services offered by humans in the process of production are referred to as human resources. The commonest human resource is labor, which is extremely significant in the process of production. In production process, human beings exchange skill and time with wages. [1]
[edit] Factors of production
Production is the process of converting inputs into outputs that are ready for sale. In the process of production there are four major factors that must be taken into account.
[edit] Land
Land, a natural resource that usually comprises the upper surface of earth. All natural forces associated with land are considered as a common factor of production. Air, water, sunlight all are amount to this single factor land. Land is a passive factor of production that has to be made active in order to involve in the process of production.
[edit] Labor
Labor is a man-made factor. Effort given by humans is termed as labor. Each individual encompasses various levels of skills, qualities, and qualifications and receives wages according to their skills. Effort that is taken by humans to convert natural resources into active resources is labor.
[edit] Capital
Man-made physical goods that are used to produce other goods is called capital. Capital can be any type of machinery, money or tools that are used in the process of production.
[edit] Enterprise
The brain behind managing all the above factors of production is enterprise. Enterprise is responsible for monitoring proper use of factors of production. [2] [3]
[edit] See also
[edit] References
1.Open-site.org entry on production. Retrieved on August 22, 2008.
2. Landandfreedom.org entry on factors of production. Retrieved on August 22, 2008.
3. Enotes.com entry on factors of production. Retrieved on August 22, 2008.
