Section Five - Production Flashcards
Production
The organized activity of transforming resources into finished products in the form of goods and services
Factors of Production
Land
Labour
Capital
Entrepreneurship
Types of Capital
Fixed Capital
Working Capital
Venture Capital
Fixed Capital
Any kind of real, physical asset that is used repeatedly in the
production of a product.
Working Capital
The money available to meet
your current, short-term
obligations
Venture Capital
A form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.
Types of Production
Primary Production
Secondary Production
Tertiary Production
Primary Production
It involves the extraction of raw materials through processes such as mining, agriculture, and fishing.
Secondary Production
This involves transforming inputs into finished products such as manufacturing and processing.
Tertiary Production
It involves services such as transportation and distribution of
finished goods
Levels of Production
Subsistence Level
Domestic Level
Surplus Level
Subsistence Level
This is where sufficient amounts are produced with the motive of survival and not to improve the economic well- being of the population.
Domestic Level
All production or transformation occurs locally or in the home country.
Cottage Industry
A cottage industry is a small-scale business often operated out of a home rather than a purpose-built facility.
Characteristics of Cottage Industries
Business is based at home
Use of local raw materials
Little technology used in production
