Meaning of Production
Creation of utility or the creation of wants· satisfying goods and services. It is said that just as man cannot destroy matter, he also cannot create matter What he can do is to give its butchery. If consuming means extracting utility from, says Fraser, producing means putting utility into.
But this is not a scientifically correct definition. To produce a thing which has utility but not value is not production in the economic sense. One may spread the cult of Yoga and promote the physical and spiritual well being of one’s friends a thing of great nullity but unless one makes it tine’s profession, his activity will not come under production.
Factor of Production
Predetermine sources required to produce a given factors of production. These cures may be raw materials or services categories of workers or of capitalists :: capital or of entrepreneurs assembling the f tors organizing the work of production. They are now generally called inputs. Fraser defined factor of production as a group or class of original product resources.the term factor.
The factors of production have been traditionally classified as Land, Labour, Capital and Organisation (or Enterprise). Now we shall briefly deal with them one by one. These factors are complementary in the sense that their co-operation or combination is essential in the production process.
The typical situation in production is that a group of complementary factors is required between which there is some degree of sustainability. Between labour and capital, the relation is both of substitution and complementary.
These are, however, two extremes. No factor is completely specific or versatile. That is. a factor can be put to several uses but not all uses. A factor of low versatility is called a specialized factor. The specific or specialized nature of the factors of production plays an important role in the disposition of productive resources.