PHYSICS Lecture Notes - Lecture 1: Capital Good, Hectare, Capital Formation
Document Summary
The productive mechanism is the mechanism or system which determines the production of various goods and services in an economy. Production is the process of creating various goods and services which are consumed by the people of a country. It is a process in which some materials are transformed from one form to another. Things used in the production process are called inputs or factors of production and the things obtained from the process are called outputs. Production also means the creation of utility as shown below. Utility is the want-satisfying power of a commodity. It is one way of creating utility by changing the form of a commodity. For example, a carpenter uses the wood to make a chair. The wood has utility for a carpenter, but it does not have utility for the final consumer. Hence, the carpenter creates utility when he makes a chair out of wood.
