production

Production

1. *Definition*: Transformation of inputs into outputs.

2. *Forms of utility*: Form, place, time, and possession.

3. *Factors of production*: Land, Labour, Capital, and Organisation.

Factors of Production

1. *Land*: Rent

2. *Labour*: Wage

3. *Capital*: Interest

4. *Organisation*: Profit

Characteristics of Factors of Production

1. *Substitutability*: One factor can be substituted for another.

2. *Complementarity*: Use of one factor requires use of another.

3. *Specificity*: Factor can only be used for one purpose.

4. *Versatility*: Factor can be used for multiple purposes.

Law of Diminishing Returns

1. *Definition*: Successive increases in input lead to less than proportionate increases in output.

2. *Causes*: Non-elastic supply of factors, non-substitutability of factors, diseconomies of scale.

3. *Limitations*: Doesn't operate in initial stages, technology changes can overcome law.

4. *Stages*: Increasing returns, diminishing returns, negative returns.

Production Relationships

1. *Product-Product Relationship*: Choosing the best combination of enterprises.

2. *Factor-Factor Relationship*: Identifying the optimum combination of inputs.

3. *Factor-Product Relationship*: Understanding the functional relationship between inputs and outputs.

Production Function

1. *Definition*: Functional relationship between inputs and outputs.

2. *Example*: Y = f(X1, X2, X3, X4, X5, X6) for freshwater fish production.