Production and Efficiency Definitions

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The production of a limited range of goods by an individual factor of production or firm or country.
Division Of Labour
Breaking the production process down into a sequence of tasks, with workers assigned to particular tasks.
The process that converts factor inputs into outputs of goods and services.
Fixed Cost 
Cost of production that doesn't change throughout production e.g. wages, rent.
Variable Cost
Cost of production that vary with output. e.g. raw materials
Economies Of Scale
Where an increase in the scale of production leads to reductions in average total costs for firms.
Diseconomies Of Scale 
Where an increase in the scale of production leads…




This brief set of revision notes covers the main terms relating to costs. The test yourself allows for some limited interaction.

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