Presentazione economics

economicsPresentation

Alessandro Dominici, Gregorio Ferrari, Aurora Maka

Index

5 · Different Industries and Their Resource Needs

1 · Influences on Factors of Production

2· :Key Factors Influencing Demand for Capital Goods

6· Labour-Intensive Production

3 · Demand for Land and Productivity

7 · Capital-Intensive Production

4 · Changes in the Economy and Production Demand

8 · Understanding Production and Productivity

Influences on Factors of Production

Type of Product: Standardized products (cars) → capital-intensive; services (beauty salons) → labour-intensive.• Productivity: Increased productivity of a factor may lead to a shift in resource use. • Cost: Lower capital costs may result in replacing labor with machines. • Short Run: At least one fixed factor (factory size). • Labour Flexibility: Easier to adjust labor (overtime). • Raw Materials & Capital: Changes depend on contracts and demand. • Optimal Combination: Avoid under-utilization (e.g., too many machines for few workers). • Productivity Goal: Aim for highest output per worker with available machines.

Key Factors Influencing Demand for Capital Goods

-Price of Capital Goods: Higher prices lead to lower demand; substitutes may increase demand.-Profit Levels: High profits encourage capital purchases. -Corporation Tax: Lower tax increases reinvestment ability. -Income Levels: Rising disposable income boosts consumption and investment. -Interest Rates: Lower rates reduce borrowing costs and increase investment. -Future Expectations: Confidence in rising sales leads to investment; pessimism decreases it. -Technological Advances: New machinery increases productivity, prompting investment.

Demand for Land and Productivity

Productivity affects demand:

Competition for prime spots

Changes in the Economy and Production Demand

Shifts in Resource AllocationStages of Economic Development

Different Industries and Their Resource Needs

Variety of Resource Requirements Examples of Industry Characteristics: Chemical Industry Agriculture

Labour-Intensive Production

Reasons for Use: Cheap Labour Supply Small Scale Operations: Demand for Handmade Quality Advantages: Flexibility Direct Feedback

Capital-Intensive Production

Trends: Firms may shift to labour-intensive if capital costs rise and productivity remains high. However, technology advancements often lead to a preference for capital-intensive methods. Benefits of Capital-Intensive: Economies of Scale Consistent Quality Reliability

Understanding Production and Productivity

• Definitions:

Production: Total output of goods/services. Productivity: Output per worker hour. Key Points: Increased productivity can lead to higher production if working hours remain constant. Rising unemployment may boost productivity as skilled workers retain jobs, but overall production could fall. Economic development typically increases both production and productivity due to technological and educational advancements, often reducing working hours needed.

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