PRODUCTION THEORY

A. PRODUCTION THEORY

a) Definition Production is to satisfy every effort to make things (goods or services) that is useful or more useful for meeting human needs. Production is divided into two, namely: production that produces utility directly, for example: a seamstress with sewing machines, fabric and yarn (factors) can produce pakaiaan to meet the needs of clothing, while the production yield indirectly, mislnya: bank raise business capital and educational institutions that scored expertise / skill. In a production number sometimes rises and falls, the situation is influenced by several factors, namely: a. Number of factors of production which is used as a source of economic b. The technique combines the techniques of production or production factors • Factors of production - Employment - Raw material - Place of Production - Technology (machine) 

• Factors of production expansion - The more modern human civilization and in accordance with the times - Advances in technology and science - Residents are increasingly - Meeting the needs of consumers both inside and outside the country - The desire to increase wealth 

• Factors of production based on the quality of human labor is divided into three kinds: - Well-educated workforce, ie obtain labor education such as teachers, doctors, and akutan - Trained manpower, namely labor obtain expertise from experience and training as a mechanic, driver, and the mason. - Unskilled workers and laborers misanya terlati ie, office boy, and the excavation of sand. 

• How to enlarge produkasi namely: a. Increase the number of factors of production (extensification), by: - Adding a land area - Adding manpower - Adding skilled workers and experts - Adding goods - capital goods or equipment

b. Increasing production (intensification), namely: - Meningkatakn of quality manpower by providing the courses - Taking into account health, specialists, work - Set mendernisasikan pemakaiaan and production equipment 

b) The theory of gradually increasing production In the production theory found in the law of didmishing return, meaning apabilan variable input is added with the same additional continuous produkasi factors fixed, the whole production increased up to a certain level tembahan it petered out. (The first law, which progressively decreased ation) The law of dimishing return is also called the law of dimishing marginal return, which is when the variable input added, while other factors of production remain the additional production (marginal return) as a result of additional (one unit) is the variable factor will eventually decrease. 

c) the optimal use of production factors In analyzing the decision produkasi efficient (least cost combinasion), namely: only one variable factor of production while others remain, for example: seoarng farmers with labor, vast land, seeds, and certain technology, fertilizer as variable inputs to produce rice. Dimishing In using the concept of marginal return and the least cost combination of knowing from berap optimal use of fertilizer. For that we need the draft again that the income of marginal (marginal revenue product) is the total additional revenue from the sale of products (rice) in addition to one unit in pennggunaan fertilizer. Using the formula: (MPP x P)