Theory Of Production

Question 1

The purpose of production

Answer 1

The purpose of production is to satisfy human wants

Question 2

Types of production

Answer 2

Primary production: this includes farming, fishing
Secondary production: this includes manufacturing an constructive work
Tertiary production: these are services rendered
Note:production is only complete when the commodity has reached its final consumer

Question 3

Factors of production

Answer 3

Land (reward rent)
Labour(reward wages and salaries)
Capital(reward interest )
Entrepreneurship (reward profit )

Question 4

Production theory

Answer 4

It concerns itself with the problem of combining various inputs given the state of technology in order to produce a stipulated output

Question 5

Production function

Answer 5

This is the name given to the relationship between rates of input of production service and the rate of outputs of product
Q=f[L,M,N,C,T]

Question 6

Basic concepts of production

Answer 6

Total product is the quantity of output that can be secured from the input of that factor
Average product is total product over output
Marginal product is the change in output resulting from employing one more unit of a particular input assuming that the quantities of the other inputs are kept constant

Question 7

Relationship between TP MP &AP

Answer 7

Fall back to note…