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the role and determinants of productivity
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Production Functions
A production Function in general, without specifying what kind, is related to the output of a production process which starts which starts with the factors of production. The production functions are an integral part for explaining marginal products as well as allocative efficiency. There are different classifications for production functions, and what constitutes them, determined by the type of production. This article of the WIKI aims to focus on the Substitional production function, explaining what it is and means, as well as the limitational, doing the same. (1)
Factors of Production
The factors of production are the inputs in any production process. The completed goods are what result from the process, also often called raw and finished goods. The more factors of production are given as input the higher the number of completed goods will be, and of course the opposite is just as true. The typical factors of production are Land, Labor and capital goods. more recently Entrepeneurship has also been added as one of these factors. Understanding these is essential to understanding the two production functions which this WIKI article focuses on. (2)
Land
Understanding what is meant by land is relatively simple. This comprises all of the natural resources that a particular producer has at their disposal. Most often this means immediate natural resources, like oil or the property on which the production facility is located. This can also include the water or ocean that is close to the facility. The factor of production called land most often comprises the natural and raw materials which are used in production and are at the disposal of the production facility.(2)
Labor
The "labor" factor of production is also ...
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...ly increase if the used factors are also being used at an increasing rate. No matter how efficient the factors of production are being used it is required to use more of them in order to significantly receive a higher output. There is also a limitation to this rule, that being that the two factors of production are used at a very similar level of involvement. If one factor of production is greatly in excess compared to the other then the excess will first be used until it is at a similar level to the factor production of which there is less. Once there are even amounts then the initial rule applies again, and an increase in both is required for significant increase in output. In order to truly be efficient with this model only if both of the factors are used at similar levels and there is no excess of one, meaning none is wasted and the optimal output can be reached.
Ratio analysis of Hafren Baum are the evidence for the lack of efficiency in 1994 and 1995. First, the total asset turnover implies that the firm is investing high as compared to its sales growth. However, in 1994 Hafren Baum constructed 3 addition outlets in suburbs which could be the main reason for short TAT from 2.1 which was before expansion to 1.5 of TAT after expansion. Secondly, the fixed asset turnover for Hafren Baum would not be as important as it would be for a capital intensive manufacturing firm like Wiegandt. In 1993, FAT was 9.1 which displays Hafren Baum’s ability in generating sales were higher as compared to FAT of 7.1 in 1995. Again, the important factor that is effecting this efficiency is the construction of new outlets in addition to lower sales
Increase in profits- It can lead to increase in the quantity produced, this will increase the revenue earned and consequently the profit will be ploughed back.
c) The long-run aggregate supply will increase as with the new invention of a more powerful computer chip. This will increase the productivity will also increase the inputs and the outputs.
In Microeconomics, there are many subjects that gave me interest in investigating to progress in my professional career as an Accountant. For three years and throughout this semester, my studies in Accounting at Dalton State College have given me more interest getting into the business program to get a job as finance accountant. Microeconomics shows which cause a departure from these economic efficiencies and the result in the decline of the social welfare at its maximum level. Economic efficiency involves in three efficiencies; efficiency in production, efficiency in the production of goods among the people, which it is also called efficiency of consumption, and allocative economic efficiency that’s in the direction of production efficiency.
The Determining Factors of Supply and Demand in a Market Economics is the study of the production and distribution of wealth and how resources are distributed for the production of goods and services within a social system. Economics provides the language, principles and a way of thinking to help people unravel why they have to make choices. (www.google.co.uk) Throughout this assignment I am going to discuss the main factors that determine the quantities supplied and demanded in the UKmarket for shoes.
Where x is the quantity/output, Ci is the total cost, and U is the utility. A firm's action can have a substantial effect on the other.
“If firms operating under perfect competition want to optimize their input level by selecting the input quantities...
A production function shows the relationship between output and input, assuming the same technology. The goal is to achieve technical efficiency by producing the maximum possible output for a given
The Function of Production The main function of production is making the goods or services which the business or company provides. This includes using expenses and resources including: * Buildings and land, like offices, factories and shops * Necessary equipment, like vehicles, computers and factory machinery * People, such as operators, managers and support staff * Raw materials and materials, such as products for retailing and materials to build up the business, like construction work These are the two most important roles, which are key to managing production. The first is the planning of production to ensure that there are enough raw materials, components, employees with the right skills, and machinery or other equipment available to make the product in large enough quantities and at the right time to meet customer needs and business deadlines. The aspect is controlling production to ensure that there are no delays or problems during the production process. Also during production it is important to monitor the costs, which are required during the production process and also waste products of the raw materials and components.
Types of Production Primary - This is the sector that involves the harvest of raw materials For example in the chocolate industry, this is the stage where sugar and coco beans are collected Secondary - This is the sector that involves manufacturing of chocolate products For example in the chocolate industry, this is the stage where the coco beans are crushed and sugar is added Tertiary - This is the sector that involves the sale of the finished chocolates For example in the chocolate industry, this is the stage where the products are sold Here is a diagram to illustrate the stages in the chain of production primary,secondary,Tertiary Task 2 - Methods of Production =
and by the mid 1920s, one out of every two cars sold was a Model T.
The first determinant – factor conditions, explains the necessary inputs for production such as capital, natural resources and their accessibility, human capital, technology, science, markets and finally geopolitical position of the nation (Porter, 1990a).
The example used above (which demonstrates increasing opportunity costs, with a curve concave to the origin) is the most common form of PPF. It represents a disparity, in the factor intensities and technologies of the two production sectors. That is, as an economy specializes more and more into one product (such as moving from point B to point D), the opportunity cost of producing that product increases, because we are using more and more resources that are less efficient in producing it. With increasing production of butter, workers from the gun industry will move to it. At first, the least qualified (or most general) gun workers will be transferred into making more butter, and moving these workers has little impact on the opportunity cost of increasing butter production: the loss in gun production will be small. However, the cost of producing successive units of butter will increase as resources that are more and more specialized in gun production are moved into the butter
Economics growth is important to a country. It addresses a country’s wealth, employment, attractiveness to foreign investment, standard of living and other important factors. Total factor productivity plays an important factor especially in the process of an economic growth where economists have long acknowledged and further communication has been ongoing on how important it is. There have been all sorts of questions with regards to economic development and macroeconomic subjects. Example, are why do economics grow? Grow faster? While labour and investment are an important contributor, technology growth and efficiency are two of the biggest sub-sections of total factor productivity. In this report, we will further examine total
Economics is basically the weighing of trade-offs when making a decision as we have scarce resources and we cannot do everything so we try to allocate the scarce resources in the most efficient way possible. A couple of economic decision-making principles I find important for the issue of weighing of trade-offs is the principle of the production possibilities frontier, opportunity cost and scarcity. In economics most principles are intertwined so even if they are similar concepts it is important to use the key concepts needed while making a decision as its implies subtle differences. The three electives courses I am thinking about picking are painting, contemporary history and mandarin. Each concept will pick a course that follows its guiding principle of efficiently as each concept has a subtle difference in the meaning of efficiently.