person to meet their own needs to constantly engage in economic activities.Since taking the necessary good from nature in sufficient quantities is not possible, they must produce.Human needs are constantly increasing, and this is spurring the development of production.On this basis, it formulated the theory of production.
All factors of production are divided into broad categories - capital, materials, labor, each of which is divided into smaller groups.For example, a skilled labor, unskilled labor, entrepreneurial efforts of individuals.The materials are divided into steel, plastic, water, electricity, etc.Capital includes buildings, goods and materials and equipment.The interaction between the factors of production, process and output of products is expressed through the production function.
classical theory of the factors of production is based on three aggregate, generalized pillars - "earth", capital and labor, which are equal in value.The participation of each of them in economic activities are equally necessary.
Earth is considered as a natural factor and the fundamental principle of any legal proceedings.This term encompasses all the great features that are given human nature (the land itself, minerals, water, etc.).The labor theory of production determines how human activity, the ability by education, experience, skills, are used to produce a useful product.Capital - a set of instruments of labor used in the production of goods (services).Today, as a separate factor of production is considered entrepreneurial activity, which brings together all of the other factors, ensuring their interaction with the help of personal initiative, knowledge, risk intelligence.This kind of view of human capital.
production theory considers only such production methods that are effective.Rationality costs of various factors determine the maximum possible output that demonstrates the production function.It shows the amount of output Q, which can be manufactured with different combinations of factors.
for maximum release realize cost-effective operation, in which all factors are included in it are used with maximum possible efficiency.Graphically, the production function is indicated by isoquant (lines showing the costs, which permit the same output).The method makes it possible to isoquants Compare combination of factors and choose the best.
intensity of use of resources in production also reflects the theory of production by a production function.For example, capital-intensive and labor-saving method of production means that under such circumstances is used more capital than labor (under the influence of technical progress).Conversely, labor-intensive or capital-saving way to show that use more labor.When the proportional use of these two resources, a method called neutral.
Today the important category of the economy are the costs.Production costs affect the profit margin, the possibility of expansion of production, and more.Therefore, there is the theory of production costs, according to which all costs are divided into the following types: public, private, financial, absolute, additional, production, short and long term.In the last decade is a popular theory of transaction costs, which focuses on the costs of implementation (advertising, marketing, service market and so on.).Costs are divided into those that depend on the production volume, and those that do not depend on it.On this basis, they are divided into fixed and variable.
