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post in: Beauty Date:02 Sep 2013, 13:54 views:4343
Production is a process of workers combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption lopez (the output). It is the act of creating output, a good or service which has value and contributes to the utility of individuals.1. Economic well-being is created in a production process, meaning all economic activities that aim directly or indirectly to satisfy human wants and needs.
The degree to which the needs are satisfied is often accepted as a measure of economic well-being.
In production there are two features which explain increasing economic well-being. They are improving quality-price-ratio of goods and services and increasing incomes from growing and more efficient market production. The most important forms of production are market production public production household production, in principle there are two main activities in an economy, production and consumption.
Similarly there are two kinds of actors, producers and consumers.
Well-being is made possible by efficient production and by the interaction between producers and consumers. In the interaction, consumers can be identified in two roles both of which generate well-being.
Consumers can be both customers of the producers and suppliers to the producers.
The customers well-being arises from the commodities they are buying and the suppliers well-being is related to the income they receive as compensation for the production inputs they have delivered to the producers.
Production output is created in the real process, gains of production are distributed in the income distribution process and these two processes constitute the production process. The production process and its sub-processes, the real process and income distribution process occur simultaneously, and only the production process is identifiable and measurable by the traditional accounting practices.
The real process and income distribution process can be identified and measured by extra calculation, and this is why they need to be yzed separately in order to understand the logic of production and its performance. The differences between the absolute and average performance measures can be illustrated by the following graph showing marginal and average productivity.