Lesson 37 pg. 104 - 108 Flashcards
Define efficiency
efficiency - the quality of producing effectively with a minimum of waste
Define input
input - the total amount invested in the production of a good
Define output
output - the total amount of a good that is produced
List the two methods by which efficiency can be improved
> First, an efficient producer may keep his input steady and increase his output
Second, an efficient producer may keep his output constant while reducing his input
*truly efficient producers turn out quality goods at relatively low prices
How does one judge whether a method of production is efficient?
To judge whether a method of production is efficient, we need to know the input and the output.
Define intelligence
intelligence - mental alertness; understanding what is going on around themselves
>creates the wealth of nations
Define the abacus
abacus - one the oldest known instruments for mathematical calculations which consisted of a frame stretched with wires upon which beads are manipulated by hand,
>It has been shown repeatedly that when used by a skilled operator, the abacus is more efficient at certain types of calculations than the fastest computer operated by an inexperienced person
What are the most efficient means of production?
The most efficient means of production are the methods that produce the most or the best goods at the lowest costs.
Define total cost
total cost - the sum cost of all the factors of production used in making goods
How does one find the total cost?
To find the total cost, it is necessary to count the expenses of producing, namely the amount spent on the four factors of production–natural resources, labor, capital, and entrepreneurship.
Define average cost
average cost - the sum cost of all the factors of production used in producing one unit of a good
