Economics Unit 3.6: Firm and Production

What is production?

• The goods and services

• The total output of goods and services produced by a firm or industry in a period of time

• 
  Measure of output that takes into account the factors of production used to create the output

• Firms and Businesses

What is Productivity?

• Capital Goods

• The total output of goods and services produced by a firm or industry in a period of time

• 
  Measure of output that takes into account the factors of production used to create the output

• Measurement of speed

What is Labour Intensive Production?

• The total output of goods and services produced by a firm or industry in a period of time

• Where a high level of investment is required, such as in machinery, equipment and vehicles, compared to the other factors of production

• Measure of output that takes into account the factors of production used to create the output

  
  

• Where the production of a good or service depends more heavily on labour than the other factors of production

What is Capital Intensive Production?

• Where a high level of investment is required, such as in machinery, equipment and vehicles, compared to the other factors of production

• Where the production of a good or service depends more heavily on labour than the other factors of production

• Measure of output that takes into account the factors of production used to create the output

• The total output of goods and services produced by a firm or industry in a period of time

What is Efficiency?

• 
  The total output of goods and services produced by a firm or industry in a period of time

• 
  Total output / Total Input

• How effective the firm is in using factors of production to generate its output

• 
  Measure of output that takes into account the factors of production used to create the output

Productivity Formulae

• 
  How effective the firm is in using factors of production to generate its output

• Output per worker per time period

• Total output / Total Input

• 
  Where a high level of investment is required, such as in machinery, equipment and vehicles, compared to the other factors of production

What is Labour Productivity?

• How effective the firm is in using factors of production to generate its output

• Cost, Low Supply, Less Efficient, Labour Relations

• Total output / Total Input

• Output per worker per time period

Disadvantages of Labour Intensive Production

• Cost, Low Supply, Less Efficient, Labour Relations

• Cost, Inflexible, Small Versus Large Scale, Lack of Initiative

• Natural Factors, Technology, Infrastructure, Government Policies

• Technology, Education, Quality and Quantity of Raw Materials Available, Effective Management, The Culture of the Firm

Disadvantages of Capital Intensive Production

• Cost, Low Supply, Less Efficient, Labour Relations

• Cost, Inflexible, Small Versus Large Scale, Lack of Initiative

• Natural Factors, Technology, Infrastructure, Government Policies

• Technology, Education, Quality and Quantity of Raw Materials Available, Effective Management, The Culture of the Firm

Influences on Production

• Cost, Low Supply, Less Efficient, Labour Relations

• Cost, Inflexible, Small Versus Large Scale, Lack of Initiative

• Technology, Education, Quality and Quantity of Raw Materials Available, Effective Management, The Culture of the Firm

• Natural Factors, Technology, Infrastructure, Government Policies