Production Flashcards
Learn all about production
What is production?
Production is any human activity which results in the creation of wealth in form of goods and services and distribution of these to satisfy wants or to provide utility
Types of production?
Primary production
Secondary production
Tertiary production
Explanation of the types of production
Primary production involves the extraction of natural resources/raw materials from the air,land and sea e.g mining,fishing
Secondary production involves the transformation of these raw materials to finished or semi finished goods e.g cement production
Tertiary production is concerned with the provision of direct and commercial services e.g
Factors of production are and their rewards are:
Land (rent)
Labour (wages and salaries)
Capital and (interest)
Entrepreneur (profit)
What is land?
Land is the source of all natural resources.. It is the factor of production where raw materials are extracted
Features of land are:
It is a free gift of nature It is fixed in supply It is fixed in location It is a subject of the law of diminishing returns It is immobile
What is labour?
Labour refers to human effort of all kinds used in the production process, for some form of payment or reward
Features of labour are
It is mobile
It is perishable
Labour is skillful
It is an active factor(it controls and combines capital and land)
What is capital
Capital refers to man-made wealth used to produce other goods and services
Features of capital
Capital is man-made
Capital is subject to depreciation
It exists in different forms
Features of capital
Capital is man-made
Capital is subject to depreciation
It exists in different forms
Who is an entrepreneur
This is the factor of production that combines other factors of production in other to produce goods and services
Characteristics of an entrepreneur
He is the risk bearer
He takes all the decisions in the cost of production
He controls other factors of production
