PRODUCTION.
Hey Guys, Today is a
new day. We are going to learn something new. We are focusing on the above
mentioned topic today, so sit back, relax and learn something today.
PRODUCTION.
Production is any activity engaged in to create goods and
services, and to distribute these goods and services till it reaches the final
consumer. In order words, It is making of goods and services available to the
consumers who are willing to pay for them in order to satisfy human wants. It
is also the creation of utility.
STAGES OF
PRODUCTION.
There are three stages of production and they include:
1. PRIMARY STAGE OF PRODUCTION- It is a
process of obtaining raw materials/resources from the Land, Sea or River. It is
also called EXTRACTIVE STAGE. This
mostly involves agricultural produce or Petroleum produce, for example Farming,
Fishing, Mining etc.
2. SECONDARY STAGE OF PRODUCTION- It is the
process of turning these raw materials into finished goods by way of
Manufacturing. For example, the process Tomato Fruit undergoes in the factory
to become Paste that is put in tin as Tin Tomato etc.
3. TERTIARY STAGE OF PRODUCTION- It is the
distribution of finished goods and services to the consumers. The people
involved in this are:
b) Retailers,
etc.
FACTORS/AGENTS
OF PRODUCTION.
There are Four Factors of
Production and they are:
1.
LAND.
Is
the First Factor of Production, it is a Free Gift of Nature which comprises of
Resources in the Sea, Ocean, Rivers, Forest etc. The Reward for Land is Rent.
Features/Characteristics of Land:
-
It is a free gift from God.
-
It is not Mobile (That it, it can’t move around).
-
It is used as a site were some Forms of Economics can
be carried out.
2. LABOR.
It
includes human efforts that are directed towards production both physical and
mental effort. Labor can be skilled or unskilled that is formal or informal.
For example, Gate man (unskilled/informal labor), Lawyer (skilled/formal labor)
etc. The Reward for Labor is Salary/Wages.
Features/Characteristics of Labor:
-
It is supplied by Man.
-
It is moveable.
3.
CAPITAL.
It
is the resources made by man that is used for production of goods and services.
This consists of machinery, tools, cash, raw materials etc. The use of
capital makes the process of production more efficient and easy. The Reward for
Capital is Interest.
Features/Characteristics of Capital:
-
Capital makes production easy and faster.
-
It facilitates the further production of goods and
services.
-
It serves as assets to the business.
4.
ENTREPRENEUR.
This
is the person who manages, controls, organizes and co-ordinates all other
factors of production. In order to achieve the objectives of the business, He
is the Decision Maker, Risk Bearer and organizer of the business. He determines
what to produce and how to produce. The Reward for an Entrepreneur is Profit.
Functions of an Entrepreneur:
-
He is the Risk Bearer.
-
He is the Decision Maker.
-
He determines the price of the Product.
-
He provides the Capital for the business.
This
concludes our session today, hope it was fun and well explained. If you are
having problems or questions do not hesitate to send me an email- dividiamond@gmail.com. Until we
meet again, remain ever blessed.
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