Click & AskCPT Chapter Theory of Production
With Bharat Galani.Duration:4hrs 10min
| Theory of Production | Duration (min:sec) |
| Production | |
| Introduction | 01:03 |
| What is Production | 15:00 |
| Intro Factors of Production | 02:53 |
| Land | 05:27 |
| Labour | 08:00 |
| Capital | 18:05 |
| Entrepreneur | 06:16 |
| Quiz | 02:52 |
| Summary | 00:51 |
| Production Function | |
| Production Function | 05:44 |
| Assumption of PF | 02:31 |
| Cob- Douglas PF | 02:15 |
| Law of Variable Proportion | |
| Total, Average, Marginal Product | 09:54 |
| Relation between AP_MP | 11:15 |
| Assumption Law of Variable Proportion | 06:29 |
| Law of Variable Proportion | 04:51 |
| 3 Stages of Variable Proportion | 25:19 |
| Reasons behind 3 Stage | 14:32 |
| Which Stage Best to Operate | 04:51 |
| Quiz | 08:18 |
| Summary | 01:27 |
| Returns to Scale | |
| Law of Returns to Scale | 12:59 |
| Diff Returns to Scale vs. Law of Variable Proportion | 03:29 |
| Producers Equilibrium | |
| Production Optimisation | 03:53 |
| Isoquant | 07:46 |
| Properties of Isoquants | 04:14 |
| Iso cost | 06:33 |
| Producers Equilibrium | 10:13 |
| Economics & Diseconomies of Scale | |
| Economics & Diseconomies of Scale | 06:04 |
| Internal Economics & Diseconomies of Scale | 09:10 |
| External Economics & Diseconomies of Scale | 12:23 |
| Quiz | 09:28 |
| Summary | 05:45 |
| Total | 4:09:50 |
Notes
Theory of Production
Index
What is Production?
Factors of Production
Production Function
Law of Variable Proportions
Returns to Scale
Product optimisation
Economies & Diseconomies of scale
Factors of Production
Factors or Resources which makes production possible
Land
Labour
Capital
Entrepreneur
Land
Not limited to soil or earth surface but includes - all free gift of nature. water,air,natural vegetation etc.
Characteristic
Nature’s gift
Supply is fixed
Indestructible power
Passive Factor
Different uses
Labour
In economics, it is mental or physical exertion for reward and not for pleasure/love
Eg - work of maid vs work of housewife
Characteristic
Human effort
Perishable
Inseparable from Labourer
Power differs from labourer to labourer
All labour are not productive
Poor bargaining power
Choice hrs of labour vs hrs of leisure
Mobile
Capital
Part of wealth used for further production of wealth
capital vs wealth
capital stock concept vs income flow concept
produced means of production
man made instrument of production
Helps in further production
Types of capital
Fixed capital
Circulating capital
Real capital
Human capital
Tangible capital
Intangible capital
Individual capital
Social capital
Production function
States relationship between input & output.
max output min input
Output- form of volume of goods or service
Input- different factors of production
Given state of technology.
q=f(a,b,c,d…..n)
Long run vs Short run
Short run capital is fixed
Assumptions of Production function
Particular unit of time
technical knowledge is constant
factors of production are divisible into most viable units
producer using best technique available
Return to Scale
Study of production in long run
All the factors are increased together
Change in output due to change in scale
change in scale vs change in variable proportion
Constant return to scale (a+b=1)
Increasing return to scale (a+b>1)
Decreasing return to scale (a+b<1)
Law of Variable Proportion vs Return to Scale
Short run vs Long run
one factor of prod changed vs all factors of prod change
change in factor proportion vs change in scale
Isoquants
Similar to Indifference curves of theory of consumer behaviour
Combination of inputs giving same level of output.
Equal product or iso-product curves.
Producer is indifferent between them.
Production- indifference curve
IC not possible to quantify the level of satisfaction
IQ level of production can be identified
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