Reference no: EM13879629

o 1-Production is a process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output). It is the act of creating output, a good or service which has value and contributes to the utility of individuals.

Economic well-being is created in a production process, meaning all economic activities that aim directly or indirectly to satisfy human 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 order to understand the origin of the economic well-being we must understand these three production processes. All of them produce commodities which have value and contribute to well-being of individuals.

The satisfaction of needs originates from the use of the goods and services which are produced. The need satisfaction increases when the quality-price-ratio of the goods and services improves and more satisfaction is achieved at less cost. Improving the quality-price-ratio of goods and services is to a producer an essential way to enhance the production performance but this kind of gains distributed to customers cannot be measured with production data.

Economic well-being also increases due to the growth of incomes that are gained from the growing and more efficient market production. Market production is the only production form which creates and distributes incomes to stakeholders. Public production and household production are financed by the incomes generated in market production. Thus market production has a double role in creating well-being, i.e. the role of producing goods and services and the role of creating income. Because of this double role market production is the "primus motor" of economic well-being and therefore here under review.

2-Reading the text regarding entrepreneurship I kinda agree with its assumptions. In today's society the entrepreneur has all but diminished. I remember back when this country was grounded on the backs of entrepreneurship. People who had an idea and ran with it to become successful business's. It seems in part that big industry has once again sucked everything up in an effort to just survive themselves. Look how many companies are merging to just survive. I also agree that we do see more social entrepreneurs today as this seems to be the big push in society. Who can advocate and push more societal issues. More and more we see movie industry and music industry in the lead for this. I think we need to get back to business of strengthening our entrepreneur values. I watched the interview with the new Speaker of the House and am impressed with what he had to say regarding an all-out tax overhaul and his ideas for a new tax structure. We need to lure business's back to our soil to help encourage this entrepreneur venture of the future. If we stay the road with our current conditions, entrepreneurs will be a thing of the past in this country.

o 3-Perfect market competition is when the market is the same across the board meaning that there is no increase or decrease in the price of a certain item or product. According to Colander (2013), a perfect competitive market has no impediments what so ever alone with no boundaries. These include social, or economic barriers that prevent a company or business from entering the competition. There are also, buyers and sellers that are price takers, meaning that they have settled for the price that has been set by the market. The items sold are the same in every way so the price will be the same from company to company.

Colander, D.C. (2013). Economics (9th ed.) Boston: McGraw-Hill/Irwin

4-The demand for labor is similar to the supply of demand but in a slightly different way. As the demand goes up so does the price and vise a versa. If you have a service that you can provide is needed then you demand for your labor will be high but on the other hand if the demand is lower you will bring in less income. For example if a storm comes through the city or town that you live in and rip's all of the roofs off then the demand for roofers will be high but if you have a normal season without the storms the demand may be lower. Labor is all dependent on the product that you can provide at a certain time frame.

5-Marginal and Average Total Cost is something that happens when you increase the production of a product. These two cost should be the same as they rise in increments. Meaning as you increase the production your cost for the product will increase. You will have to make sure that you use the best bidder when purchasing the raw material to keep the fix cost at a minimum. You can use the YouTube video to better understand the reason that things increase like the price you pay for the raw material to what you have in the final product. In the video they used oranges but this can be used in many other things like cars, televisions and so on. All of these products will have other factors that will take into play to produce.

Questions posted by my teacher and I need to answer them.

1-How would a firm use the law of diminishing marginal productivity to determine how much of something to produce? May you provide an example?

2-What is the role of the entrepreneur in translating cost of production into supply?

3-What distinguishes the short-run from the long-run? May you think of business/firm examples for each?