Production Function and Economic Significance
Delve into the concept of production function, terms used in production like farm sizes, and the broad scope and significance of economics in various aspects of life, including its impact on individuals and the economy. Learn how economics plays a crucial role in decision-making, resource allocation, and global trade.
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Presentation Transcript
Production is defined as the transformation of one or more inputs intooneor moreoutputs. The functional relationship between the inputs used and the outputs obtained is known as production function.
Production Function A systematic and mathematical way of measuring the relationship among different quantities of inputs or input services used in production of a commodity and crossponding quantities of output is called production function.
Some terms used in production Farm: It is a piece of land where crops & livestock enterprises are taken up under a single management and has specific boundaries. Marginal Farmer: Farmer owning less than 2.5 acres of dry land and 1.25 acres of wet land is called marginal farmer. Small farmer: Farmer owning land holding ranging from 2.5 acres to 5.00 acres of dry land and above 1.25 acres and below 2.5 acres of wet land is called small farmer.
Scope of Economics The scope of economics is wide and varied. In the early period it was called political economy and macroeconomic concepts such as aggregate production, income savings and employment received more attention from the classical economists. Economics and economists have come a long way since then. We find application of principles of economics in business, environment, natural resource resource management, marketing, etc., Thus the scope of economics has become enlarged encompassing many areas of study. management, human
Significance of Economics Economics has great significance to individuals, to the economy, production and supply of goods and services. Income, savings, wages, employment, money, banking and inflation are some of the issues that affect people in one wayor the other. We have unlimited wants but the resources available to satisfy the wants are not only limited but also have alternative uses. So, it becomes a question of choosing wants soas to maximize oursatisfaction.
Cont.. With emerging. What happens in trade somewhere may have implicationselsewhere, across the world. Poverty reduction and better standards of living are considered priority objectives of development. All theseaspectsare dealt byeconomics. An understanding of basic economics would be of great use to every one of us to manage our income, savings, investment, banking, tradeand consumption. globalization, free international trade is
