The production process is the transformation of economic resources (factors of production) into goods and services. Factors of production are: labor (workers and their qualifications), land (land on which the enterprise is located, raw materials), capital (industrial building, machines, tools).
The economic prosperity of any company is ensured not only by the named resources - labor, natural, capital. No less important is another factor that links all the others together: entrepreneurial ability. Entrepreneurs direct their organizational and management efforts to the best way use existing production resources. This will allow them to achieve high results (more products best quality) and receive a profit if successful.
You already know that all resources in the economy are limited, that is, they are not enough to produce the amount of goods that people would like. For the economy to function properly, producers must learn to make choices from limited resources. If a company is building a house for its employees, then its available resources (building materials, workers, construction equipment) can no longer be simultaneously used to repair its administrative building. The government, with a limited budget, may delay the construction of several schools in order to use the funds to repair busy roads. As a result of choice, you have to give up something in order to get something else more fully.
Each factor of production has a specific owner. The owner of a factor of production must receive compensation or payment for the fact that someone uses his resource with his consent. Each of us owns at least one of the factors of production (labor, land, capital, entrepreneurial abilities) that can generate income. The amount of this income depends on the quantity and quality of the factor of production you own. If you only have a certain specialty and health, then you receive remuneration for your work in the form wages. Among participants in the modern economy, this source of income is the most common.
Suppose you only possess the factor of production known as entrepreneurial ability. To organize production, you will have to use other people's factors of production: rent land, machines and equipment, hire workers, take out financial resources on credit. By selling your products, you can pay part of the proceeds to the owners of the factors of production. Part of the proceeds will remain with you as profit. Profit will be the reward for your efforts and the payment for your entrepreneurial abilities.
The income that a factor of production such as land brings is called rent. The land owner may not carry out entrepreneurial activity and do not make any additional efforts to use it. For example, you, owning a plot of land, can rent it out for temporary use to other persons on contractual terms, for a fee. This fee will be your income received from the use of the land.
Capital (from Latin capitalis - main) is property capable of generating income. Capital is a source of income invested in a business in the form of means of production. If a firm can hire labor and rent land, then the capital usually belongs to it.
Please note that the concept of “capital” has several meanings: physical capital (means of production created by people to produce goods and services), monetary or financial capital (money used to acquire physical capital), investment (investment of material and funds for production).
Real, fixed capital is the means of production in the form of machines, tools and other production equipment. Money as such does not produce anything; it can be used to purchase various means of production. Money used or intended for the acquisition of physical capital (invested in production) should bring income to its owner in the future.
During the production process, temporarily free cash due to: deductions for repairs and replacement of worn-out labor tools; formed as a result of a temporary gap between receiving money from the sale of goods and paying wages; part of the profit accumulated to expand production, etc.
Inaction of temporarily free funds is contrary to nature itself market economy, “unemployed money” reduces production efficiency and reduces the return on capital. They can be used as loan capital - temporarily free funds lent on the terms of repayment and payment. Return on loan capital is the interest paid by borrowers for using other people's money.
In general, the contents of this section can be represented as follows:
The income of the owners of production factors is at the same time the costs of the owner of the enterprise (firm). Therefore, the efficiency of a company’s production activities largely depends on the rational combination and use of attracted and own factors of production. How to determine how effective a company's economic activities are? To do this, it is necessary, in particular, to compare the results of work with costs (expenses, expenses).
ECONOMIC AND ACCOUNTING COSTS AND PROFIT
As noted above, the activity of a company makes sense for its owner only if it makes a profit. Let us recall that profit appears as a result of the excess of revenue from sales of products over the sum of costs for all factors of production for this activity. Thus, any company producing products must cover its costs. Otherwise, its owner will face losses and ruin.
Production costs— these are the costs of the manufacturer (the owner of the company) for the acquisition and use of production factors.
For an enterprise (firm) economic costs- these are the payments that the company must make to suppliers of necessary resources (labor, material, energy, etc.) in order to divert these resources from use in other industries. These payments are divided into internal and external, and different approaches are used in their calculation.
Internal (or implicit) costs— these are the costs of resources belonging to the owner of the company. For example, the premises in which the company is located are the property of its owner; the owner of the company uses his own labor as a manager.
Since these resources belong to the company itself, there will be no external costs (payments for renting premises, wages for a hired manager), but, from the point of view of the company, these internal costs are equal cash payments, which could be obtained for their own resources with their alternative use (the best possible). Thus, his own premises could be rented out, and the owner of the company, without receiving a satisfactory income, could receive income in the form of a salary, working for hire.
That is why the remuneration for performing entrepreneurial functions is called normal profit and is included in internal costs. Internal costs are often hidden, implicit in nature, but they must be taken into account when making economic decisions. And if an accountant records the costs incurred, trying to calculate how much it will cost the company to produce products, then the owner of the company solves the problem of economic choice: is it worth continuing his business or is it better to find a more profitable option for using his own resources.
External costs- payment for factors of production that are not the property of the owner of the company. These include costs for materials, energy, labor, etc. d. External costs are obvious and reflected in accounting documents, which is why they are called accounting or explicit costs.
Thus, economic costs include external (accounting, or explicit) and internal (implicit) costs with normal profit included in the latter. This is the payment for resources necessary to attract and retain them in a given activity (use case).
Differences between economic and accounting costs inevitably lead to different definitions of profit.
Economic profit is the difference between a firm's total revenue and economic costs.
This approach to profit allows you to assess the possibility of existence of the enterprise (whether the revenue covers not only external, accounting, but also internal costs, including normal profit). Exceeding cash receipts amount economic costs means that the enterprise has a net profit, its existence is justified, and it can develop successfully.
Accounting profitis the difference between total revenue and accounting costs.
Economic profit focuses the entrepreneur not just on generating income, but on comparing this income with that which could be obtained as a result of an alternative use of available resources. For example, an entrepreneur, having organized production, received an accounting profit of 3,000 rubles. And if he put the money in the bank, he would receive 4,000 rubles. as a percentage. Hence, if accounting profit turns out to be less than economic profit, taking into account opportunity costs, then the use of the resource should be considered ineffective from the entrepreneur’s point of view.
Different understandings of a company's profit by economists and accountants lead to different conclusions about the state of affairs in the company.
Which method of calculating costs - accounting or economic - is it better for an entrepreneur to use when analyzing not only the efficiency of his production, but also the prospects for its development? It is likely that the accounting method should be used to calculate the actual value of costs and profits. To make decisions about choosing one of the alternative options for investing resources, only the economic method of calculating costs is acceptable.
Any business owner strives to increase profit margins. For this purpose, he improves the technology and organization of production, stimulates an increase in worker productivity, and introduces a resource saving regime. This leads to a reduction in all costs and contributes to profit growth.
When calculating production costs, the owner of a company must take into account their various types. Let's get acquainted with the costs that are most significant for the manufacturer to take into account.
Activities of any household And industrial enterprise based on the use of production factors and the receipt of corresponding income from this. In their work, therefore, these subjects use particularly important objects and elements that have a significant impact on the possibility and efficiency of functioning. Let us next consider the main types factor income.
General information
In market conditions, the formation of factor income has a number of features. However, in general, the well-known mechanism of competitive price equilibrium operates in this process. The owner always owns one or another production resource. No entity will transfer the right to use them free of charge to other persons. IN last decades there is a tendency to increase resource costs. As a result, factor incomes also decrease. In the economy, this leads to changes in the behavior of companies and citizens, confronting them with the need to find substitutes for expensive resources, to look for ways to reduce production costs. Only entrepreneurs are in demand for funds. They belong to that part of society that can organize and implement the production of goods and services that are necessary for the end consumer.
Theoretical aspect
Manufacturing is the process by which spiritual or material goods are produced. To start it, you must have at least a performing entity and material to create a service or product. As production factors, Marxist theory identifies the means and subject of labor, as well as the labor force of people. At the same time, science divides them into two groups. The first includes the personal factor, and the second - the material factor. The first is presented in the form of labor as the totality of a person’s spiritual and physical abilities to work. The material factor is the means of production. The organization of an enterprise presupposes the coordinated interaction and functioning of these elements. According to Marxist theory, the interrelation of factors, the characteristics of their combination determine the class composition in society, the relations between public associations and social orientation production cycle. The marginalist doctrine identifies four groups of elements used in the production of goods:
- Entrepreneurial activity.
- Capital.
- Work.
- Earth.
Factor income
As mentioned above, each resource has its own price. Factor income in the economy is the income that the owner receives from the use of production assets. In practice, several types of remuneration are defined:
- Rent (mountain, land, water, etc.) as income from natural resources used.
- Wages as remuneration for work.
- Interest as factor income from the use of money capital.
- Entrepreneurial income as a reward for the use of relevant abilities.
- Profit as a factor income for the use of real capital.
- Receipts from intellectual property in the process of using knowledge.
Behind each production factor there is a certain subject (or group of them):
- Labor belongs to the workers.
- Land - to landowners.
- Entrepreneurial abilities - for production organizers.
- Capital goes to the owners.
All groups of these entities claim factor income from the total share of revenues. 
Classification
In theory, income from resources is divided into individual economic and national economic. Factor incomes are:
- Population.
- Enterprises.
- States.
- Society.
The totality of these incomes determines the highest demand for productive resources, services, and goods.
Specifics
Based on the results of their activities, resource owners receive nominal income - cash. Regarding them, between the state and the owner are created difficult relationships. Power through action tax system collects a certain portion of funds. The amount that remains after all obligations are paid off is net factor income. The value of this balance is determined not only by the amount of money, but also by the dynamics and state of prices for services and goods. In this regard, there is such a thing as the purchasing power of funds. 
The financial analysis
When conducting it, indicators are used that determine marginal, average and gross factor income. The latter is the proceeds from the sale of all products in money. Average factor income is calculated per unit of products sold. The marginal revenue is the increment in gross revenue from the sale of additional products. It is considered as the ratio of revenues to the increase in the quantity of goods sold. The definition of this indicator has special meaning For the company. In economic practice, the law of diminishing returns applies. The calculation of marginal revenue serves as the basis for an enterprise to change production volumes downwards or upwards.
The essence of the law of diminishing returns
In the process of activity, any entrepreneur:
- As accurately as possible, determines a socially significant order, qualitative and quantitative characteristics.
- Organizes the management of the company so that the set goals are achieved.
These tasks are considered the main ones in the activities of an entrepreneur. A businessman always tries to predict the market and reduce risk and uncertainty as much as possible. An entrepreneur must sense the limit beyond which the profitability of his enterprise will decline. In progress management activities a businessman is faced with the phenomenon of falling profitability. Its essence is that the additional costs of one resource, with the quantity of others remaining constant, yield less and less volume of additional goods and, consequently, gross revenue. With a one-time and identical increase in the available production factors, a different result may be obtained.
This situation can lead to an increase in the company's output and gross revenue. However, there is a risk in this case too. When increasing product offer the market value may decrease and the income from the sale of each additional unit of production may decrease. This indicates the need to reduce production scale.
Pricing
The enterprise acts as a manufacturer and seller of products, as well as a buyer of factors. As a seller, his typical interest is to sell the product as expensively as possible. Acting as a buyer in the market of production factors, he strives to acquire the necessary resources as cheaply as possible. All these operations are subordinated to revenue. It is considered the main incentive and indicator of the company's performance. The size of production costs and their structure determine certain requirements for the resource acquisition scheme. The only criterion in this process is the priority of the lowest manufacturing costs with high quality of the manufactured product. By comparing the market prices of production factors with the marginal products that are created with their help, the entrepreneur forms his choice.
Demand curve
The general principles in accordance with which its formation is carried out boil down to the following provisions:
- The starting point is the demand for manufactured products.
- Achieving equality of marginal profits and costs determined by company policy.
- The structure of demand for resources is created when a unit of capital spent on the acquisition of any means of production produces a maximum marginal product.
Labor supply
It has its own characteristics that are associated with:
- The size of the population and the size of its working population.
- The qualitative composition of society, the degree of professional and general training.
- Duration working week and day.
- Compliance of the qualification structure of the working population with the needs of the national economic complex for workers in certain specialties.
The overall wage rate is determined at the point of intersection of the supply and demand curves. An increase in the need for labor increases the level of its payment. This, in turn, leads to increased employment. A decrease in demand for labor resources leads to the opposite phenomena. In the process of movement of the value of capital, the availability of available funds, their supply and the need for them are of particular importance.
Conclusion
As mentioned above, all resource owners receive income from them. It is expressed in different forms and is of paramount importance for the movement of the enterprise in the market and expansion of production. What acts as profit for the owner of the resource is costs, costs for the consumer (buyer) of this factor.
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Factor income as an active part of the balance of payments reflects the amount of national income received into the country, created abroad by labor, capital and property of residents.
The amount of factor income, according to Say, is determined by the laws of supply and demand. In particular, there is a market for entrepreneurship itself, on which the wages of the entrepreneur are determined. The demand for entrepreneurship is a function of the demand for its product. Say describes in more detail the factors limiting supply in this market. These factors include the personal (moral) qualities of entrepreneurs, their experience and connections.
National income, factor income - the total monetary income received by households over a certain time in exchange for factors of production provided to entrepreneurs. National income is equal to net national product minus depreciation and indirect taxes.
The exhaustion of a firm's revenue by factor income is essentially equivalent to the fact that its economic profit is zero. But with any market structure, a company in a short period can be both profitable and unprofitable. In addition, the structure of real markets always differs from perfectly competitive ones.
One of the main types of factor income is interest. This concept in modern economic literature has a dual content: in in a broad sense interest is the income that brings in any capital lent and embodied in monetary, tangible or intangible assets; in a narrow sense, interest is the income that borrowed capital brings, expressed only in monetary form. In this regard, the question of the essence and forms of capital itself becomes fundamentally important.
This so-called factor income theory was subsequently linked by bourgeois economists to another theory, which was based on the principle of price calculation. In other words, the cost of goods as crystallization of social necessary expenses labor is represented as the sum of material costs and factor income. Of course, the cost of raw materials, supplies and depreciation are not profitable. However, the results of past labor transferred to the product, as well as the newly created value, are not the result of entrepreneurial activity. In the process of using labor employees not only value is created equal to the amount of accrued wages, but also surplus value, which takes the form of profit and rent. By obscuring the decisive role of labor in the creation of all types of income without exception, bourgeois economists do not distinguish between productive labor and socially useful labor used in the service sector. According to followers of modern bourgeois political economic theories, any activity is productive if it makes it possible to make a profit. On this theoretical axiom, essentially, the whole methodological basis bourgeois national income statistics.
If we add the balance of factor income to NVP, we get net national income.
Nordhaus: A simplified theory of factor income distribution was first proposed by John Bates Clark...
Income from economic resources (factors of production) is called factor income.
The balance of factor income from abroad is understood as the difference between factor income received and paid. For example, the salary of domestic citizens (the so-called residents) received abroad is added to the national income, and the salary is subtracted foreign citizens(non-residents) paid in the country.
The concepts of “factors of production” and “factor income” are interconnected, and this article will display this relationship.
Factors of production can be represented by the following, using which:
The organization of production of goods is carried out;
Volumes are regulated finished products.
In turn, they can be classified according to the following characteristics: natural, labor, capital, current, information and financial.
Based on the listed types of resources, it is necessary to briefly describe each of them. For example, labor can be represented as a combination of mental and physical abilities used by people in the process of creating goods. Its main characteristics are:
Intensity, determined by the amount of labor consumed over a given period of time;
Productivity measured by the number of products produced per unit of time.
This includes land, which is divided into:
Areas where production facilities are located;
Arable lands on which various crops and crops of grains, melons, etc. are grown;
Mineral deposits.
Another important natural resource is It can only be possessed by a certain part of the people performing a huge set of various functions, without which successful efficient production activities are simply impossible.
The meaning of the concept of “capital” was gradually adjusted with constant development economic worldview. For example, Ricciardo and Smith considered it a means of production. Other experts in the field of economics argued that it combines money and securities. Today, capital means everything that can bring income to its owner. Based on the last definition, it is divided into real, monetary and financial. However this factor still requires some clarification. Thus, the financial component of capital in the form of shares, bonds and bank deposits cannot be classified as factors of production, since they are not directly related to the production process.
Factor income includes those obtained from the use of factors of production. When comparing them, the following indicators are formed.
From the use of labor we receive factor income - wages. Rent is the income that the owner regularly receives from the use of property and land. The interest is determined by the fee from the use of borrowed funds (loan interest) or funds invested for a certain period by the investor (deposit interest).
The concept of “net factor income” is used for funds received from abroad. In other words, this is the difference between the income that compatriots received abroad and the income of foreign citizens who received it on the territory of our country.
Factor incomes can be used in calculating many macroeconomic indicators of the state. Below are some examples.
The following factor incomes are distinguished:
Wages and other compensation for time worked to citizens;
Own income of organizations, enterprises and institutions;
Rental income;
Profit remaining after payment of wages and interest on the loan;
Net interest represented by the difference between corporations paid to others and those received from other firms.
Lecture 2.Income from factors of production
1. Ground rent
Land rent is a regular payment from an entrepreneur (tenant) to the owners of land and other natural resources (forest) for the use of their property.
(Rent (from Latin) – given back, returned:
1. Rent
2. any regular income (especially from real estate) that does not require the recipient to engage in entrepreneurial activity)
The main natural resource is land. It has a peculiarity: its total quantity is unchanged (there is as much land in any country as there is)
2. Percentage As you know, the word “percent” (translated from Lat) means a hundredth of a particular number. However, in in this case interest means the payment of an entrepreneur (borrower) by any individual or legal entities(creditors) who lent him their money or real capital. In turn, for the creditor this will result income.
Lenders can be persons such as a bank that provided an entrepreneur with money (loan) for the purchase of means of production, or any lessor who leased buildings, structures, and equipment belonging to him.
Accordingly, interest (as income) will appear in different forms: loan interest, rent. For an entrepreneur, all these forms will be payment for attracted (borrowed or leased) capital.
3. Salary.
One of the main factors of production is labor.
Work can be defined as purposeful activities of people to create vital benefits.
Rice. 2. The role of labor in the development of man and society
Labor process - a complex and multidimensional phenomenon. The main forms of its manifestation are the expenditure of human energy, the interaction of the worker with the means of production (objects and means of labor) and the production interaction of workers with each other, both horizontally (the relationship of participation in a single labor process) and vertically (the relationship between the manager and the subordinate) . The role of labor in the development of man and society is manifested in the fact that in the process of labor not only material and spiritual values are created that are intended to meet people’s needs, but also the workers themselves develop, acquire skills, reveal their abilities, replenish and enrich knowledge. Creative character labor finds its expression in the emergence of new ideas, progressive technologies, more advanced and highly productive tools, new types of products, materials, energy, which, in turn, lead to the development of needs.
Thus, in the process labor activity not only are goods produced, services are provided, cultural values are created, etc., but new needs emerge with demands for their subsequent satisfaction (Fig. 2).
Work force - This is a person’s ability to work, the totality of his physical and mental capabilities used in production.
The realization of labor power occurs in the labor process, therefore the concepts of “labor” and “labor” as a human resource of production are often identified. But it's not the same thing.
The most important indicator of the use of the personal factor is labor productivity, i.e. effectiveness. It is measured either by the amount of output per unit of time or by the amount of time per unit of output.
What does effectiveness depend on? economic activity? The main FACTORS that determine the level of labor productivity can be grouped into six points:
The level of education, qualifications and professionalism of employees, the organization and culture of their work;
The degree of interest of producers in the results of labor, their discipline and responsibility;
The level of development of science and technology and the effectiveness of their application in production;
Rational and economical use of raw materials, materials, fuel, energy and other resources;
Labor intensity, i.e. the degree of its intensity, energy, speed of labor operations;
Natural conditions (abundance and availability of minerals, forests, water, soil fertility, climate, etc.).
For example, in economic practice the system has been widely known for more than a century Taylor. This is a whole range of measures to scientific organization labor and rationalization of production management, which was first developed and implemented in the USA back in turn of the 19th century– 20th century by American engineer and innovator Frederick Taylor.
In particular, the NOT system assumed a deep division of labor, detailed analysis labor actions, elimination of unnecessary, awkward movements, determination of optimal work techniques and practicing them until they become automatic, strict regulation of the entire work cycle, strict labor rationing, alternating work and rest to reduce fatigue.
In turn, the rationalization of management provided for: strict discipline and control at the enterprise, correct selection and placement of personnel, a clear system for advanced training and career advancement of workers, the principle of their material interest in production efficiency based on wage differentiation.
Human factor in the conditions of scientific and technological revolution.
The rapidly developing STR (scientific and technological revolution) is causing huge changes in the economy. The introduction of electronics, computers, flexible automated systems and other innovations into it has significantly increased its overall scientific and technical level. In the new conditions, the role of the human worker in production is fundamentally changing. He ceases to be a mechanical performer “with the machine” and becomes the main link in technological process– its controller and regulator.
Its size is determined by a number of factors, of which the following seven can be distinguished:
Labor cost;
Quantity and quality of labor;
Increased employee productivity;
The qualifications of the employee and the nature of the work;
Conditions on the labor market;
The degree of socialization of wages; (not all wages go to workers, part of it is transferred to various funds: for example, a pension fund)
Other signs.
It is necessary to distinguish between monetary or nominal, And real wages. Nominal wage is the amount of money received per hour, day or week. The real wage is the amount of goods and services that can be purchased with a nominal wage. Nominal and real wages do not necessarily move in the same direction. During our perestroika, nominal wages grew, and at the same time real wages fell due to a faster rise in prices for goods and services.
Basic forms and modern remuneration systems
The main forms of wages are time-based and piecework wages.
The original form was a time wage, in which the amount of earnings is determined in accordance with the time worked. This form predominated in initial stages development of capitalism and had its origin in day labor. With this form, strict control over the rhythm of work on the part of the entrepreneur was necessary, and the desire to make more profit was associated with lengthening the working day.
With the transition to machine production, the worker was assigned to a specific workplace and it became possible to measure the amount of his labor by the volume of products produced. On this basis, a transition was made to the piece or piecework form of remuneration at prices per unit of created products. Now there is no need to control the worker’s labor intensity. In an effort to earn more, he himself increases the intensity of his work. Control is shifting towards the quality of manufactured products. At the beginning of the twentieth century in industry developed countries the piecework form of remuneration becomes dominant. With the development of conveyor and then semi-automated production, the rhythm of labor is set by a system of operating machines. Under these conditions, piecework wages are negated by production technology itself. Reserves for increasing production efficiency by streamlining the labor operations of an individual worker and better organization jobs were on the verge of running out. The use of piecework payment lost all meaning, and there was a return to the time-based form.
IN modern economy developed countries V pure form
time form is applied only for certain types works, mainly in the service sector and small-scale commodity sector. There are many systems, usually taking into account the quantity and quality of operations performed by a worker. Rates and salaries are combined with various types of bonuses for high quality products, economical use of materials, with the participation of workers in the distribution of profits based on the results of the year. IN modern systems wages there is a desire to express the principle that the interests of the enterprise and workers coincide and do not contradict each other. A worker can receive part of his income in the form of shares in “his” enterprise.
Behind long years the capitalist world has developed many efficient systems wages that encourage workers to work highly productive and of high quality:
Dividing wages into basic and additional (assumes that the first, basic, part of earnings (usually 70-80%) is paid in accordance with the employee’s qualifications, and the second part represents various additional (additional payments for overtime work, for night work) and bonus payments.
The development of “participation systems” presupposes the real inclusion of employees in the affairs of the company: participation in capital, participation in management, participation in profits (this is ensured by the acquisition of shares by employees of the company)
How are wages regulated?
Regulation of wages is carried out with the help of the state. It is the state that passes laws that help resolve conflicts between employees and employers. The state can determine the required minimum wage in the country, as well as the basic qualification standards that entrepreneurs are guided by. Direct regulation labor relations carried out on the basis of contracts and agreements defining working conditions and payment (individual labor contracts, collective agreements (agreements)).
3. Profit is the income of an entrepreneur.
Profit is a reward to a businessman for his work, for the expenditure of his entrepreneurial abilities, for the fact that he:
Paid for and collected together the factors of production: land, capital, labor;
Organized their economic functioning;
Took responsibility and risk for their effective use.
Numerically profit is the excess of revenue from the sale of products over all expenses
Structurally, it can contain a variety of elements:
Wage;
Land rent;
Interest on capital;
Risk premium;
Savings fund.