Production Latin “Producere” (to lead/bring forth) Production - process of transforming inputs into outputs that meet human needs and wants - the resources and tools that make it p... Production Latin “Producere” (to lead/bring forth) Production - process of transforming inputs into outputs that meet human needs and wants - the resources and tools that make it possible for products/services to get created. “Production is the creation of utility and the allocation of resources to produce goods and services” - Paul Samuelson Utility = satisfaction Producer - individual or entity that creates goods/services by utilizing various resources such as labor, raw materials and capital. Producers play a crucial role in our economy by transforming inputs into finished products that meet consumer demand. Factors of production Land - All natural resources used in production (soil, minerals, animals, water, forests). It represents the raw materials necessary for creating products Labor - Human effort involved in production including physical and mental work (Factory workers, skilled professionals) Capital - manmade resources used in production (Machinery, tools, buildings and technology). it enhances the efficiency and productivity of land and labor Types of capital Physical capital - Machinery, tools, buildings and equipment Human capital - skills, knowledge, experience of the workforce Financial capital - Funds available for business operation (Investments, Loans, Capital reserves that support production activities). Entrepreneurship - Ability to innovate, take risks and organize the 3 other Factors of Production to create goods. Are crucial for driving economic growth & development through their ideas and leadership. Types of outputs in production Tangible goods - physical, can be touched/measured Intangible goods - non-physical goods which provide value (Healthcare, Entertainment, Financial Services) Intermediate goods - goods used to create another good (Flour - cake) Resources - living/nonliving things satisfying human needs - are the ingredients for production Full-time job - more production Contract job - less costs (no employee benefits) Factor payments - income earned for providing resources (Land, Labor, capital and entrepreneurship) Factor 1 - Rent (Capital) Factor 3 - Interest (Capital) Factor 2 - Wages (Labor) Factor 4 Profit(Entrepreneurship) Salary - Monthly (Salary from the word salt, payment for the Roman soldiers) Wages - hourly, daily or weekly. Two types of profit -Net Profit and Gross profit Rent - Land Rent is the payment mode to landowners for use of these resources (Ex. A business pays rent to lease land to build a factory) Wages - Labor -the factor payment for labor is wages. This is the income earned by workers for their time and effort in the production process Example: a nurse earning a monthly salary of 30 dollars for providing healthcare services Factory workers – wages Office workers – salary Bus drivers - wages Salesmen - wages Engineer - salary Interest - Capital Capital includes tools machinery and buildings used in production -interest is the payment to capital owners for providing resources (Ex, a business pays interest on a loan used to buy new machinery) Machinery - Rent Equipment - rent Financial - interest Loan Interest - Financial Capital ( Loan) Gross profit- revenue from sales minus the cost of goods sold (COGS). Does not include operating expenses, taxes or interest Gross profit = Total Revenue (₱4500) - Total Cost Of Goods/COGS (₱2500) =₱2000 TOTAL REVENUE - COGS = GP Net Profit - The total profit after all other expenses have been factored in. Including, costs, taxes and interest have been deducted from total revenue Total Revenue - Total Expenses = Net Profit Total expenses = taxes+interest Philippine economic resources Land - 14.400 species of plants, 510 species of animals unique to the Philippines Forestlands - owned by the government -15,805,235 15,050,316 hectares public 755,009 hectares unclassified -Since 1982, Philippine exports of forest products are steadily declining. -forests decimated due to large-scale logging, conversions of forestlands to commercial use, kaingin and forestry accounted fires Non-forest lands - disposable and alienable -47% of land in the Philippines -is mainly devoted to farming, poultry, livestock raising and related agricultural activities Farming - Coconut, sugarcane, banana, mango and pineapple are major crops of the Philippines -Q3 2021, farming and forestry accounted for 54% of Philippine agricultural production, rice production went up by 6.7%, corn went down by 18.6% -still lacking in basic agricultural products Poultry and livestock - major component of Philippine agriculture -Poultry Includes chicken and duck meats and eggs -livestock includes pork, cattle, carabao and goat meats and dairies -livestock contributes 15.3% of agricultural production -poultry contributes 14.6% of agricultural production -can be unstable due to epidemics (bird flu, foot and mouth disease) Mineral deposits -major metals ( copper, gold, silver, nickel, chromium, iron and lead) -nonmetallic minerals (pebbles, dolomite, marble, cement and guano) -Gold is the most precious, accounts to almost 50% of the total value of metallic minerals produced in the country. -Chromium deposits in Zambales, Cagayan De Oro and Iligan -Copper is the leading base metal product Marine Resources -coastlines extend up to 36.289 km -Fish production contributes to 16.2% of Philippine gross agricultural output Commercial fishing - aka deep sea fishing, catching of fish in marine waters using fishing boats of >3 gross tons and beyond 7 kilometers of the shoreline limit -22.5% production Municipal fishing - production from capture activities in marine and inland (fresh) bodies of water (lakes, rivers and streams) <3 gross ton boats or uses gear not requiring the use of fishing boats -35.6% production Aquaculture - rearing or raising of aquatic products (fish,oysters,mussels,seaweed etc.) in a controlled environment (fish cages, fish ponds and fish pens) -41.8% production Manmade resources - capital goods which have been accumulated through investments Human Resources -15 and above eligible for work 74.3 million manpower resources -43.6 million were parts of the labor force, the rest weren’t Of the members of the labor force, 39.8 million are employed, 3.8 million were unemployed Read more