Scribd Logo
Upload

Welcome to Scribd!

  • 30 views

    Concept of Production

    Uploaded by

    Paul Gio Oebanda
    The document discusses the key concepts of production including defining production as the process of transforming inputs into outputs. It outlines the four factors of production - land, labor, capital, and entrepreneurship - and how they relate to business organizations. Finally, it examines the main types of business organizations (sole proprietorship, partnership, corporation, cooperative), comparing their characteristics, requirements for registration, and overseeing agencies.

    Copyright:

    © All Rights Reserved

    Concept of Production

    Uploaded by

    Paul Gio Oebanda
    30 views19 pages
    The document discusses the key concepts of production including defining production as the process of transforming inputs into outputs. It outlines the four factors of production - land, labor, capital, and entrepreneurship - and how they relate to business organizations. Finally, it examines the main types of business organizations (sole proprietorship, partnership, corporation, cooperative), comparing their characteristics, requirements for registration, and overseeing agencies.

    Copyright

    © © All Rights Reserved

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses the key concepts of production including defining production as the process of transforming inputs into outputs. It outlines the four factors of production - land, labor, capital, and entrepreneurship - and how they relate to business organizations. Finally, it examines the main types of business organizations (sole proprietorship, partnership, corporation, cooperative), comparing their characteristics, requirements for registration, and overseeing agencies.

    Copyright:

    © All Rights Reserved
    30 views19 pages

    Concept of Production

    Uploaded by

    Paul Gio Oebanda
    The document discusses the key concepts of production including defining production as the process of transforming inputs into outputs. It outlines the four factors of production - land, labor, capital, and entrepreneurship - and how they relate to business organizations. Finally, it examines the main types of business organizations (sole proprietorship, partnership, corporation, cooperative), comparing their characteristics, requirements for registration, and overseeing agencies.

    Copyright:

    © All Rights Reserved
    You are on page 1of 19

    The Concept of Production

    1. define production
    2. discuss the importance of the factors of production and their implications to everyday life.
    3. enumerate the different kinds of business organizations;
    4. examine the duties and functions of various business organizations
    What is Production?
     process of turning limited
    resources into goods and
    services
     transforming inputs into
    outputs to satisfy demands
     only consider economic
    activities in the formation
    of goods and services
    intended for TRADE or
    SELLING
    https://www.dreamstime.com/bread-making-process-agriculture-concept-set-bread-making-process-vector-illustration-image134338555
    The Four Factors of
    Production
    1. LAND – all natural resources
    2. LABOR – skilled or unskilled
    workers
    3. CAPITAL – capital goods
    machineries, buildings, other
    equipment/tools used in
    production)
    4. ENTREPRENEURSHIP -  the
    drive to develop an idea into a
    business. An entrepreneur
    combines the other three factors
    of production to add to supply.
    https://www.thebalance.com/factors-of-production-the-4-types-and-who-owns-them-4045262
    Factors of Production
    FACTORS OF PRODUCTION FACTOR INCOME
    Land Rent
    Wage ( hourly or daily rate)
    Labor Salary ( monthly or bimonthly overall
    wage)
    Capital Interest
    Entrepreneurship Profit
    https://policonomics.com/circular-flow-diagram/

    Circular Flow Model


    https://biophyseco.org/biophysical-economics/what-is-biophysical-economics/
    Production Function
    • tries to explain the efficient allocation of resources
    • shows the relationship between the amount of inputs ( factors of
    production) and the quantity of outputs ( goods and services)
    • explained by the production possibility frontier (PPF) and marginal
    product concepts
    Law of Diminishing Marginal
    Returns
    • also called diminishing marginal productivity
    • if at least one factor of production is fixed, the total output
    resulting from an increase in the variable input is
    increasing BUT the additional or extra output produced
    by the additional input is DIMINISHING ( decreasing)
    Law of Diminishing Marginal
    Return restated

    “ As you add variable resources to fixed


    resources, the additional output will
    eventually decrease
    Example
    Number of Workers Number of Pizza Marginal Product
    ( Input) ( Total Product) (Additional output
    generated by
    adding additional
    workers (input)
    0 0 0 increase due to
    1 5 5 specialization
    2 15 10
    3 20 5 Law of Diminishing
    4 22 2 Marginal Returns
    set in
    5 22 0
    6 18 -4 Negative Return
    25

    Number of Pizza 20

    15

    10
    Total Product
    5 Marginal Product

    0
    0 1 2 3 4 5 6
    -5
    Number of Workers
    -10
    Production Possibility Frontier
    • illustrates the MAXIMUM production capacity of a firm given the
    available resources
    • graphically represented by a curve ( production possibility curve or
    PPC)
    • assumes that all given inputs are utilized efficiently

    • Law of Increasing Opportunity Cost


    “ as you increase production of one good, you give up more in
    producing the other good.”
    Assumptions in the PPF
    • the economy is employing all its available resources
    ( FULL EMPLOYMENT)
    • the quantity and quality of the factors of production
    are fixed
    • The economy is producing only 2 goods: Consumer
    goods (directly satisfy wants and needs)
    Capital goods (indirectly satisfy wants by
    making possible the more efficient production
    of consumer goods)
    Example
    Bread Tablets
    500 0
    400 10
    300 20
    200 30
    100 40
    0 50
    Bread

    Tablet
    4 types of Business Organizations
    • Sole Proprietorship
    • Partnership
    • Corporation
    • Cooperatives
    SOLE PARTNERSHIP CORPORATION COOPERATIVE
    PROPRIETORSHIP
    NUMBER OF 2 OR MORE At least 2 INCORPO- DEPENDS ON THE
    OWNERS 1 RATIONS NUMBER OF MEMBERS

    owner is the main decision partners share decision -separate legal entity with - jointly owned and
    maker and responsible for making and other business rights and obligations managed by members
    the management of the responsibilities ( B.P. Blg 86) - voluntary membership
    CHARACTERIS- business profit is shared among - can enter into contracts - enjoyed tax privilege
    TICS partners - owners have limited ( by virtue of R.A. 9520)
    liability
    -General Partnership - shareholders and
    - Limited Liability Partnership ( administrators are bound
    LLP) by their Article of
    Incorporations (AOI) and
    by-laws

    REQUIRE- 1. Registered name 1. verify business name and 1. verify business name 1. Get organized
    MENTS FOR 2. Permits and clearances reservation and reservation 2. Prepare general
    REGISTRA- 3. Tax receipts 2. Article of Partnership(AOP) 2. AOI, bylaws statement called
    TION 4. self-employement and joint undertaking 3. Paid -up capital deposit economic survey
    certificate 3. pay fees 4.buy and register stock 3. draft by-laws
    4. certificate of Recording of and transfer books 4. draft atticles of
    the Articles of Partnership coopeation
    5. secure bond for
    accountable officers
    1. DTI Securities and Exchange Cooperative
    AGENCY WHERE 2.Barangay/City Securities and Exchanage Commission (SEC) Development Authority
    TO REGISTER 3. BIR Commission (SEC) (CDA)
    4. SSS
    Remember These Suffixes

    • Co. ( Company) - can be used for General Partnerships


    • Coop. ( Cooperative)
    • Corp. ( Corporation)
    • Ent. ( Enterprise)
    • Inc. ( Incorporated)
    • Ltd. ( Limited)
    • Ltd. Co. (Limited Company)

    You might also like