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Economic Region Of Production
In economics and microeconomics, the economic region of production is an offshoot of the theory of production function with two variables. It is a cost-oriented theory which defines the region in which the optimal factor combination will lie.H.L. Ahuja, Advanced Economic Theory, Microeconomic Analysis, S.Chand (2007) It serves as a map of the region of optimal production. Economic region of production consist of negatively sloped portion of all isoquants. Basic theory Production lines Q1 and Q2 are the isoquants, depicting the technically efficient factor combinations at different levels of production. The ridge lines A and B demarcate the technically efficient region of production. Above the line OA and below the line OB slope of the isoquants is positive which means that increases in both capital and labour are required to produce a given fixed quantity of output. The ridge lines are the combination of points where marginal product In economics and in particular neoclassical ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Microeconomics
Microeconomics is a branch of economics that studies the behavior of individuals and Theory of the firm, firms in making decisions regarding the allocation of scarcity, scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the economy as a whole, which is studied in macroeconomics. One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce Economic efficiency, efficient results. While microeconomics focuses on firms and individuals, macroeconomics focuses on the total of economic activity, dealing with the issues of Economic growth, growth, inflation, and unemployment—and with national policies relati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Production Function
In economics, a production function gives the technological relation between quantities of physical inputs and quantities of output of goods. The production function is one of the key concepts of mainstream economics, mainstream neoclassical economics, neoclassical theories, used to define marginal product and to distinguish allocative efficiency, a key focus of economics. One important purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors, while abstracting away from the technological problems of achieving technical efficiency, as an engineer or professional manager might understand it. For modelling the case of many outputs and many inputs, researchers often use the so-called Shephard's distance functions or, alternatively, directional distance functions, which are generalizations of the simple production function in economics. In macroeconomics, aggregate produc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Isoquant
An isoquant (derived from ''quantity'' and the Greek word ', , meaning "equal"), in microeconomics, is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. The x and y axis on an isoquant represent two relevant inputs, which are usually a factor of production such as labour, capital, land, or organisation. An isoquant may also be known as an "iso-product curve", or an "equal product curve". Vs. indifference curves While an indifference curve mapping helps to solve the utility-maximizing problem of consumers, the isoquant mapping deals with the cost-minimization and profit and output maximisation problem of producers. Indifference curves further differ to isoquants, in that they cannot offer a precise measurement of utility, only how it is relevant to a baseline. Whereas, from an isoquant, the product can be measured accurately in physical units, and it is known by exactly how much iso ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Marginal Product
In economics and in particular neoclassical economics, the marginal product or marginal physical productivity of an input (factor of production) is the change in output resulting from employing one more unit of a particular input (for instance, the change in output when a firm's labor is increased from five to six units), assuming that the quantities of other inputs are kept constant. The marginal product of a given input can be expressed as: :MP = \frac where \Delta X is the change in the firm's use of the input (conventionally a one-unit change) and \Delta Y is the change in the quantity of output produced (resulting from the change in the input). Note that the quantity Y of the "product" is typically defined ignoring external costs and benefits. If the output and the input are infinitely divisible, so the marginal "units" are infinitesimal, the marginal product is the mathematical derivative of the production function with respect to that input. Suppose a firm's output ''Y ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Distribution (economics)
In economics, distribution is the way total output, income, or wealth is distributed among individuals or among the factors of production (such as labour, land, and capital). In general theory and in for example the U.S. National Income and Product Accounts, each unit of output corresponds to a unit of income. One use of national accounts is for classifying factor incomes and measuring their respective shares, as in national Income. But, where focus is on income of ''persons'' or ''households'', adjustments to the national accounts or other data sources are frequently used. Here, interest is often on the fraction of income going to the top (or bottom) ''x'' percent of households, the next ''x'' percent, and so forth (defined by equally spaced cut points, say quintiles), and on the factors that might affect them (globalization, tax policy, technology, etc.). History Distribution has been central in the study of political economy since the 19th century, as shown in scholarship ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
History Of Microeconomics
Microeconomics is the study of the behaviour of individuals and small impacting organisations in making decisions on the allocation of limited resources. The modern field of microeconomics arose as an effort of neoclassical economics school of thought to put economic ideas into mathematical mode. Origins Microeconomics descends philosophically from Utilitarianism and mathematically from the work of Daniel Bernoulli. Utilitarianism Utilitarianism as a distinct ethical position only emerged in the 18th century, usually credited to Jeremy Bentham, but there were earlier writers, such as Epicurus who presented similar theories. Bentham's An Introduction to the Principles of Morals and Legislation (1780) begins by defining the principle of utility: He also defined how pleasure can be measured: A list of utilitarians also includes James Mill, Stuart Mill and William Paley. Expected utility Daniel Bernoulli wrote in 1738 this about risk: He states that as an individual w ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Production (economics)
Production is the process of combining various inputs, both material (such as metal, wood, glass, or plastics) and immaterial (such as plans, or knowledge) in order to create output. Ideally this output (economics), output will be a goods and services, good or service which has value (economics), value and contributes to the utility (economics), utility of individuals. The area of economics that focuses on production is called production theory, and it is closely related to the consumption (or consumer) theory of economics. The production process and output directly result from productively utilising the original inputs (or factors of production). Known as primary producer goods or services, land, labour, and capital are deemed the three fundamental factors of production. These primary inputs are not significantly altered in the output process, nor do they become a whole component in the product. Under classical economics, materials and energy are categorised as secondary factors a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Productivity
Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production process, i.e. output per unit of input, typically over a specific period of time. The most common example is the (aggregate) labour productivity measure, one example of which is GDP per worker. There are many different definitions of productivity (including those that are not defined as ratios of output to input) and the choice among them depends on the purpose of the productivity measurement and data availability. The key source of difference between various productivity measures is also usually related (directly or indirectly) to how the outputs and the inputs are aggregated to obtain such a ratio-type measure of productivity. Productivity is a crucial factor in the production performance of firms and nations. Increasing national productivi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Productivity Model
Productivity in economics is usually measured as the ratio of what is produced (an aggregate output) to what is used in producing it (an aggregate input). Productivity is closely related to the measure of production efficiency. A productivity model is a measurement method which is used in practice for measuring productivity. A productivity model must be able to compute ''Output / Input'' when there are many different outputs and inputs. Comparison of the productivity models The principle of comparing productivity models is to identify the characteristics that are present in the models and to understand their differences. This task is alleviated by the fact that such characteristics can unmistakably be identified by their measurement formula. Bases on the model comparison, it is possible to identify the models that are suited for measuring productivity. A criterion of this solution is the production theory and the production function. It is essential that the model is able to desc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
