Production is the process that involves converting resources into goods or services.
The four factors of production
Entrepreneurs play a special role in the economy - they are responsible for setting up and running businesses. Without them production would not take place. (famous examples include Bill Gates and Steve Jobs)
Definition: an individual who organizes the other factors of productions and risks their own money in a business venture.
Labour intensive: where production relies more heavily on labour relative to machinery.
Capital intensive: where production relies more heavily on machinery relative to labour.
Definition: an individual who organizes the other factors of productions and risks their own money in a business venture.
Labour intensive: where production relies more heavily on labour relative to machinery.
Capital intensive: where production relies more heavily on machinery relative to labour.
Productivity
The amount of output that can be produced with a given quantity of resources. (output per unit of input)
Raising productivity in an economy is highly desirable as an increase in productivity => more goods produced for fewer resources.
Productivity may be increased by firms in numbers of ways:
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