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PRODUCTION

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by

Jessica Wei

on 3 April 2015

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Transcript of PRODUCTION

PRODUCTION
RESOURCES
LAND
RENT
WAGE
INTEREST & DIVIDEND
PROFIT
LABOUR
CAPITAL
ENTREPREN-EURSHIP
PROCESS
PRODUCTIVITY
PROS
CONS
DIVISION OF LABOUR
GEOGRAPHICAL
Enough Demand
Standard Product
EXAMINING INPUT COSTS
RESEARCH & DEVELOPMENT
SUBSTITUTING MATERIALS
PRIMARY
SECONDARY
TERTIARY
MASS PRODUCTION
SPECIALIZATION
AUTOMATION
to minimize scarcity, one increases
encompasses
encompasses
encompasses
LEARNING CURVE
includes
includes
includes
includes
income takes the form of
income takes the form of
income takes the form of
income takes the form of
GOODS
SERVICES
combine to create
combine to create
All natural resources
defined as
Concrete, tangible products
Activities one engages in to sell to others
Human efforts
defined as
Quality
Health
Innovation
Education
Motivation
also considers
Labour Force
Employed
Unemployed
All people able & willing to work
Participation Rate
Percentage of Labour Force Population that is a part of an active Labour Force
p=LF/LFpop
LF=U+E
OUTPUT/INPUT
calculated by
to accomodate
to ensure profit
to ensure profit
Investment Decisions
Present Costs & Future Benefits
CAPITAL GOODS
Country's Economic Level
Future Growth
consists of
comprised of
comprised of
People of ages 16 and older who have either sought but have been unable to find work within the past month or were laid off.
People who have a job.
examined through
examined through
A good produced in order to produce something else more efficiently.
defined as
based on
The imagination to see how and idea can work and the foresight to see the possibility of making a profit.
defined as
depends on
The incentive to invest in capital goods which requires a sacrifice of present consumption.
Substitute Goods
Complementary Goods
Derived Goods
Underemployment
Employed labourers not working up to full potential, resulting in a lack of motivation.
Work close to land
Manufactures staple products
Link between producer & consumer
Staple Goods
Finished Products
Service
Any activity that serves to satisfy human wants
defined as
affected by
affected by
affected by
affected by
PRODUCERS
Profit = Total Revenue - Total Expenses (Costs)
Profit=TR-TC
Total Revenue
Total Cost
Variable Costs
Fixed Costs
calculated by
includes
Costs which vary with output changes
Costs which do not vary with output changes
Total expenses, including fixed and variable costs;
TC=TFC+TVC
comprised of
comprised of
consists of
consists of
Quantity produced x Cost per unit
OR
Innovation
Invention
Jessica Wei
The process of making changes and improvements to a pre-existing product.
To think up or produce a new device.
Devise a way to combine input factors differently so that the input would have less effect on profits.
Invest in research & development to come up with more efficient methods.
Use lower-costing substitute materials.
can increase by
can increase by
can increase by
Capital-Intensive Countries
Labour-Intensive Countries
Certain locations are naturally suited for specific productions.
The production process is divided into several smaller tasks.
improved by
to measure
Countries with production involving higher levels of capital processes
Countries with production involving higher levels of labour processes
A tool for measuring the effect of experience on efficiency.
defined as
PROS
Reduced time for training as the tasks are simplified
One only needs to train someone to specialize in a specifc task rather than the entire process
Practice makes perfect; as time goes on the worker would increase in efficiency
As training time decreases, productivity increases due to more work time and simplified task
refers to
Dangerous & boring jobs are eliminated
Increase in productivity leads to a higher standard of living
Increase in unemployment rate as jobs that used to require labour are now done by machines
e=E/LF
Employment Rate (e)
u=U/LF
Unemployment Rate (u)
e+u=100%
Since E and U make up the entire Labour Force,
A decision-making process that determines how, when, where, and how much capital should be spent on investment opportunities.
focus for
referred to as
determines
produces
produces
produces
Labour Force Population
Anyone aged 16 and older
used to calculate
used to calculate
consists of
How should the product be produced?
answers
To what extent can a country humanely divert its resources into production of capital goods?
Wealth gap between rich & poor increases as future growth increases with each investment in capital goods.
The complete process of making goods and services available to the consumer
defined as
done by
utilize
utilize
to maximize
to maximize
Marginal Cost
The additional cost needed to produce one more unit
MC=ΔTC/ΔQ
used to calculate
CONS
Loss of Pride in Craftsmanship
Growing Dependency
Loss of Flexibility in Workers
Needs large production runs to be profitable
consists of
consists of
Practice Makes Perfect
Culminative Quantity
Average Time per Unit
Learning Curve
# of units
average time
total time
# of lots
1
2
4
8
10
20
40
80
20
16
12.8
10.24
20
32
51.2
81.92
always doubles
# lots x units per lot
always X% of previous average
av. time x # lots
Assume 80% Learning Curve...
illustrated as
Humans are still necessary to centralize control & maintain machines
Total Fixed Cost (TFC)
Total Cost (TC)
Total Variable Cost (TVC)
Price
Quantity
Price
Quantity
Price
Quantity
Average Variable Cost (AVC)
Average Total Cost (ATC)
Average Fixed Cost (AFC)
Break Even Point
Total Revenue (TR)
Total Cost (TC)
LOSE
PROFIT
Total Cost, Total Fixed Cost, & Total Variable Cost
Average Total Cost, Average Fixed Cost, & Average Variable Cost
Total Revenue, Total Cost, & Break Even Point
I Love Lucy
Ford
Flintstones
Tucker
TR=P x Q
Total amount of sales gained given the quantity of products sold
EX: the Krabby Patty at Krusty Krab's
EX: Patrick Star is deciding whether or not to buy a jellyfish catcher for his favourite hobby: jellyfishing.
EX: due to cold winter climates resulting in an abundance of maple trees, Canada specializes in the production of maple syrup...
EX: ... However, Canada is less likely to produce bananas, as this tropical fruit cannot grow in cold climates.
example
EX: Canada is more capital-intensive; its population is much lower compared to other developed countries and it has an abundance of natural resources, like oil sands and lumber, to offer.
example
builds on idea of
case study
A method of production where the general scope of production is cut down into smaller tasks or is limited in goods and services produced in hopes of increasing productivity.
defined as
case study
EX: the chum at Plankton's Chum Bucket vs. Mr. Krab's Krabby Patty
EX: the Kelp fries that come with the Krabby Patty in the Krabby Patty combo
comprised of
comprised of
comprised of
EX: the sea pickles and other ingredients used in the Krabby Patty
Without the jellyfish catcher, Patrick can get stung by five jellyfish in one hour and still not catch a single one. With the catcher, he can use the same amount of time and catch the five jellyfish that stung him.
example
continued
Patrick observed that the advantages of investing in a jellyfish catcher outweighed not purchasing one. And to a jellyfishing enthusiast like himself, it was definitely well worth the money.
continued
EX: Apple's iPhone and iPad
EX: the earliest idea of a talking telegraph (telephone) actually originated from Italian inventor Antonio Santi Giuseppe Meucci - 25 years before Alexander Graham Bell began his formative research.
EX: the flat fee of 12 dollars Jasmine has to pay in order to go on a magic carpet ride.
pay up ma'am
but I'm your girlfriend
EX: Mrs. Puff's driver's ed course at Bikini Bottom
EX: on top of the flat fee, Aladdin also charges Jasmine 2 dollars per kilometre flown. Aladdin is a very bad boyfriend.
EX: ice farming in Arendelle
EX: ice blocks
EX: ice sculptures so realistic they look alive
EX: ice sculpting
EX: Oaken helping out with the Big Summer Blowout
EX: retail service
EX: China is more labour-intensive; it has a large population and focuses its profits around intensive manufacturing and assembly line production.
example
EX: instead of using sea pickles imported from another city in his Krabby Patties, Mr. Krabs decided to buy sea cucumbers grown locally at Bikini Bottom that were much cheaper in costs.
EX: Mr. Krabs did research on how to increase revenue at the Krusty Krab and saw that his best solution was to give Spongebob a larger stove to work on. The expense for the new stove is easily outweighed by the doubled daily sales the Krusty Krab now receives.
EX: Mr. Krabs had realized that he was paying his employees at the Krusty Krabs too much for his liking... So he cut a portion of Spongebob and Squidward's salary and used the money in advertising the restaurant to gain more customers instead.
EX: Squidward feels underappreciated being a cashier at the Krusty Krab. He would much rather show off his talents on the clarinet.
EX: Squidward works as a cashier at the Krusty Krab.
EX: Jellyfish Fields is the perfect place for jellyfishing at Bikini Bottom.
example
affects
EX: in order to afford a jellyfish catcher, Patrick Star ate 9 Krabby Patties instead of 10 every day for one month.
example
Mass Production:
Ford invented the assembly line for his vehicle factory, increasing the factory's
productivity
by decreasing the time used for producing one car from 12 hours to 90 minutes.
Employment:
Ford's goal was to make cars affordable for everyone; he did this by paying his employees more than double the normal wage and lowering the prices of Ford vehicles by lowering the cost of materials.
Process:
Ford company utilizes the secondary production process, using natural resources (steel) to manufacture vehicles and then sell them to the public.
Specialization:
The Flinstone family utilized specialization and the assembly line to produce gravelberry pies. When the buyer demanded for more gravelberry pies, the Flinstones increased
productivity
by speeding up the production process - however, the family was exhausted in the end due to overwork.
Unemployment:
Fred Flintstone starts off the episode getting fired from his old job, seeking for another job opportunity. He is still a part of the Labour Force, although he had moved from the employed population to the unemployed.
Process:
The Flintstones utilize the secondary production process, using natural resources (gravelberries, flour, etc.) to manufacture gravelberry pies and then sell them to the supermarket chain. The Flinstones also encountered a net loss of income, as the cost of producing one gravelberry pie was 12 cents more than the price it was sold at.
Mass Production:
Tucker used the assembly line to increase the factory's
productivity
.
Resources:
Tucker used natural resources (aluminum) to manufacture his vehicles. Tucker also demonstrated traits of an entrepreneur by building ground-up from an idea, taking risks and being persistent with his vision.
Process:
Tucker utilized the secondary production process to manufacture vehicles and then sell them to the public. He also
innovated
cars by putting the engine at the back of the car, as well as adding headlights that follow the road. Tucker offered his cars for sale at $1000, a relatively low price compared to his competitors, to increase the demand for his products.
Specialization:
Lucy and Ethel experienced division of labour at the chocolate factory, where the production of chocolates were divided into different rooms and connected by a conveyor belt travelling through them. However, because they did not have enough training for the specific tasks,
productivity
decreased due to the streamline's interdependence on each other. Similarly, Lucy and Ethel specialized in chores (as doing it for a long time would eventually increase efficiency) and had no experience with the outside world, whereas Ricky and Fred specialized in working while they had no idea how to cook meals or do housecleaning.
Employment:
Lucy and Ethel found a job at a candy making factory at a job seeking firm.
Process:
The chocolate factory demonstrated a secondary production process, using natural resources (chocolate) to produce candies and sell them to the public.
example
example
example
case study
case study
case study
case study
case study
Workers may lose motivation to do work, resulting in the fall of quality and quantity
A disruption at a particular point of a streamline can have a domino effect of the rest of of the assembly line
Since workers are only trained in doing one simple thing, tasks cannot be interchangeable between workers
Specialization gains profit with larger outputs and will not gain money from small productions
No additional tailoring is necessary; all products are "cookie cutters" of one standard model
EX: the iPhone 6
A large enough demand to require a large input and output
EX. Apple has enough customers demanding the iPhone 6 to gain profit from the large inputs and outputs in mass production.
(another great video:
http://www.investopedia.com/terms/s/specialization.asp)
encompasses
encompasses
illustrated as
defined as
defined as
measured by
measured by
make up
Full transcript