Factors in Economic Production

FACTORS IN ECONOMIC PRODUCTION 1. Explain the impact of industrial technology on three aspects of life The use of technology occurs when human power is replaced by machine power. The use of technology in the industrial sector certainly has an impact on three aspects of life, namely social, economic and political. a. Social impact: the use of technology will take over the role previously held by humans and be replaced by the use of machines, technology and computers. This of course will result in a massive reduction in workforce. If it is not responded to well, the industrial revolution could cause the number of unemployed to increase. b. Economic impact: the use of production machine technology can improve the quality and quantity of production results. However, to replace human power with machine power requires large capital. If a company only focuses on purchasing sophisticated equipment and it doesn't produce results, the company could go bankrupt. But if successful, it will provide significant profits. c. Political impact: the use of technology has a positive impact on increasingly economical production costs and increases maximum production. However, if this results in a large reduction in labor, it will also increase the number of unemployed. This is certainly an issue that must be considered. 2. Explain the assumptions of consumer theory using the cardinal approach and ordinal approach The following are the assumptions used in consumer behavior theory using the ordinal and cardinal approaches: a. Basic assumptions of the ordinal approach: • consumers have preferences for consumer goods which are expressed in the form of an indifference map; • Consumers have a certain income; • consumers try to get maximum satisfaction from the goods they consume; And • an indeverence curve that is further away from the zero point (orgin) depicts increasingly higher satisfaction. b. Basic assumptions of the cardinal approach: • Consumption satisfaction can be measured in units; • the more goods consumed, the greater the level of satisfaction; • The law of diminishing marginal utility occurs; • additional satisfaction for additional consumption of 1 unit of goods can be valued in money, so that the greater the satisfaction, the more expensive the price. Based on the explanation above, the following is an analysis of statements that might fall into the assumptions of the cardinal approach: a. Consumers have a preference pattern, which is an assumption of the ordinal approach b. Consumers have a certain income which is an assumption of the ordinal approach c. The level of satisfaction can be determined using units of account, which is an assumption of the cardinal approach d. The curve that is further away from the zero point depicts higher satisfaction, which is an assumption of the ordinal approach e. Consumers seeking satisfaction is a cardinal approach assumption 3. Explain the meaning of consumer behavior theory, ordinal approach and indifference curves a. What is consumer behavior theory? Consumer behavior theory is a theory that studies consumer behavior in consuming goods or services in order to achieve maximum levels of satisfaction. In consumer behavior theory there are two approaches, the first is the cardinal approach and the second is the ordinal approach. b. What is the ordinal approach? In consumer behavior theory, there are two approaches. One of them is the ordinal approach. The ordinal approach is a consumer analysis that is based on the assumption that the level of consumer satisfaction from consuming goods cannot be calculated or measured. The ordinal approach assumes that consumer satisfaction in consuming an item does not need to be measured, it is enough just to know it and consumers are able to rank the high or low level of satisfaction obtained from consuming a number of goods or services. The ordinal approach can be analyzed using indifference curves and budget lines. c. What is an Indifference Curve? The indifference curve is a curve used to describe the combination of two types of consumer goods that provide the same level of satisfaction. The following is the shape of the indifference curve: 4. Write down examples of original and derived factors of production The following is the definition and examples of original and derived production factors: • Original or primary production factors are production factors that are directly related and are available in nature. for example land and labor. • Derived production factors are production factors that are not directly related to nature and are factors resulting from the development of human culture. for example capital and entrepreneurship Based on the explanation above about original and derived production factors. The following is an analysis of statements that might be included in derived production factors: • Capital is a derived factor of production • Labor is the original factor of production • Nature is the original factor of production • Entrepreneurship is a derived factor of production 5. Explain the factors for increasing quantity and quality through extension To increase the quality and quantity of production, this can be done by means of intensification, extensification, diversification and rationalization: • Intensification is an effort to increase production output by improving work methods and increasing the productivity of existing production factors • Extensification is an effort to increase production output by adding production factors • Diversification is an effort to increase production results by developing or increasing the diversity of types of production results • Rationalization is an effort to increase production results by implementing a more effective management system with mastery of science and technology. Based on the explanation above, there are ways that can be used to increase the quality and quantity of production. The following is an analysis of statements that might be included in the extension method factors: • Adding cultivated land is a way of extensification, • Adding workers is a way of Extensification • Improving irrigation includes intensification efforts, namely improving working methods, • Using superior seeds includes intensification efforts, namely improving work methods, • Purchasing land processing machines is an extensification effort, namely adding production factors in the form of capital