Economics of Production

Topics: Economics, Capital, Factors of production Pages: 24 (8247 words) Published: September 13, 2012
In economics, production is the act of creating output, a good or service which has value and contributes to the utility of individuals.[1] The act may or may not include factors of production other than labor. Any effort directed toward the realization of a desired product or service is a "productive" effort and the performance of such act is production. The relation between the amount of inputs used in production and the resulting amount of output is called the production function. Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία (oikonomia, "management of a household, administration") from οἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the house(hold)".[1] Political economy was the earlier name for the subject, but economists in the latter 19th century suggested 'economics' as a shorter term for 'economic science' that also avoided a narrow political-interest connotation and as similar in form to 'mathematics', 'ethics', and so forth.[2] ECONOMICS OF PRODUCTION

Average yields in the Region are about 4 tonnes per ha, although some orchards in Australia, China and elsewhere can produce 15 tonnes per ha, under close spacings and intensive tree management. The price for fruit varies with year, season and cultivar. Early fruit in Guangdong fetch US$2 per kg, whereas the bulk of the crop is sold at half this price in the middle of the season. Premium cultivars with small seeds such as “No Mai Chee” and “Kwai May” can sell for US$10 or more per kg in a light year. Prices for export fruit are normally higher than those sold locally. In both markets, lychees are also more expensive than the related longan. Little information is available on the profitability of enterprises within the Region. An analysis in Australia showed that trees could be as profitable as alternative crops such as avocado, macadamia and mango. Picking, packing and marketing are the most expensive part of the operation, and account for 65 percent of total costs. There is little benefit in trying to reduce growing costs, whereas there are financial rewards to be gained by improving the efficiency of harvesting and packing. It is not known whether similar improvements are possible in Asia, with lower labour costs. 1. Productivity

Yields vary widely with cultivar, season and country. In China, a ten year old tree can carry 100 kg of fruit. Average yields range from 2 to 5 tonnes per ha, although well-managed, high-density plantings can yield 15 tonnes per ha. Production is generally more consistent in Guangdong than in Fujian or Guangxi. Over-crowding, inadequate watering and fertilizing, stink bug and fruit borer lower productivity in neglected orchards. Warm temperatures during winter can also reduce flowering across the production areas. Average yields in Viet Nam are a low 2 tonnes per ha, but only about half the plantings are of bearing age.

Average production in Thailand is 3.5 tonnes per ha, with the highest yields in Chiang Mai and Chiang Rai in the north, and the lowest in Samut Songkhram in the south. Longan generally has higher yields than lychee, but fetches a lower price. Lychee is quite productive in India, especially under irrigation. Average yields have increased by 50 percent in the past ten years to 7 tonnes per ha. Productivity is highest in Bihar, followed by West Bengal. Some well-grown orchards in Bangladesh can be just as productive, however, average yields here are lower than in India. Production in Nepal ranges from 40 to 100 kg for ten year old specimens. The higher yields are usually associated with more intensive tree management, including irrigation. In Australia, ten year old trees can produce 80 kg of fruit, although average yields are half that. An early economic analysis of production on the Atherton Tableland with “Fay Zee Siu” assumed average yields of 55 kg...

References: [edit] Natural resources
Ayres and Warr (2009) are among the economists who criticize orthodox economics for overlooking the role of natural resources and the effects of declining resource capital.[8] See also: Natural resource economics
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Factors of Production Essay
  • Essay about Production Theory
  • Production and Perfect Competition Research Paper
  • Production Possibilities & Opportunity Cost Essay
  • Production Possibility Curve Essay
  • Test Bank: International Economic Essay
  • Economics: Tutorial Solutions Essay

Become a StudyMode Member

Sign Up - It's Free