Production Chapter 11 Flashcards
What are some ways to improve labour productivity?
1.Increasing wages
2.Improve working conditions
3.Opportunties for promotion
4.Promation of education and training opportunities
What does the production process involves ?
1.Manfacter of goods
2.Distrubution of goods produce
3.The provision of services
What is factors of production?
Are resources that are used to produce goods and services
What are the four factors of production?
Land, Labor, Capital, Enterprise
Land is
All naturally free occurring gifts of nature
Labor is
The physical and mental efforts of man
Capital is
Man made aids to production eg factories
Enterprise is
The ability to combine all the other factors of production and take risks in establishing new ventures
Land reward/factors income is
Rent
Labour reward/factor income is
Wages
Capital reward/factor income is
Interest
Enterprise reward/factor income is
Profit
Production cost consists of
Fixed Cost and Variable Cost
Fixed cost is
Cost that will be incurred whether or not output is produced
Example of Fixed Cost
Light bill, water rate, rent
Variable Cost is
Vary with the level of output that is produced
Example of Variable Cost
Wages
How to calculate Total Cost
Fixed Cost + Variable Cost = Total cost
Marginal Cost is
The change in total cost when one more unit of labour is hired
How to calculate Marginal Cost?
Change in Total Cost ÷ Change in Quantity
How to calculate the Variable Cost?
Total Cost - Fixed Cost
What is Production Cost?
Consist of :
~ Fixed Cost
~ Variable Cost
