Factors of production and their classification by origin. The main factors of production. Production function and its factors

Factors of production are resources used to create economic benefits.
Factors of production are resources that are considered by their owners as sustainable sources of income.
In modern economic science, there are five main factors of production:

Capital
Earth
Entrepreneurial ability
Information

Capital.
Capital - all interpretations of the concept of capital can be divided into two classifications.

Capital is identified with any natural form:

Capital is identified with the means of production - physical capital (including raw materials, materials and semi-finished products);
Capital is identified with a certain amount of money or other financial assets - financial capital;
Capital is identified with accumulated knowledge, health, abilities, skills, etc. - human capital.

These interpretations are united by the fact that capital is an accumulated stock intended for further production and capable of generating income in the future.

Capital is divided depending on the areas of application: industrial, commercial, loan.

Industrial capital - goes through various stages of production and takes on various functional forms: financial

capital-means of production (production capital) ^ production ^ financial capital. In the course of operation, the production capital is divided into fixed and circulating: this division is based on different principles of participation in the production cycle.
Working capital - includes the costs of raw materials, materials, fuel, electricity, wages, etc. and is completely consumed in each production cycle, losing its natural form. The cost of the working capital is reimbursed to the company in its entirety through the price finished products.
Fixed capital - participates in many production cycles, retaining its natural form, while fixed capital is consumed, that is, it is partially worn out. as it wears out, it transfers its value to the value of the finished product.
The following types of wear of the main capital are distinguished:

Physical - loss of natural form, measured by depreciation;
Technological (functional) - associated with the emergence of more modern fixed assets, measured by additional costs for modernization;
Economic - a decrease in demand for manufactured goods.

Trading capital - functions in the sphere of circulation and its main function - sale of goods.
Loan capital is a part of social capital that is temporarily free and which can be provided in the sphere of production and exchange on the terms of urgency, repayment and payment. Sources of temporarily free funds:

Population;
enterprises and organizations;
Amortization fund and payroll fund;
Budgetary organizations.

The form of movement of loan capital is credit.
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Loan income - interest.
Earth.
Land - those natural benefits that nature provides for human use (these benefits are not the result of human labor).
Features:

Land is a freely irreplaceable and quantitatively non-growing resource;
The land has a relatively stable heterogeneity: in fertility, according to the position of the product sales market.

Income from land is land rent. Land rent is determined depending on the characteristics of land productivity and is called differential.
Differential rent is the difference between the cost of production of a product, formed on the worst plots of land, and the cost, formed on the best plots.
Work.
Labor is an expedient activity of people to transform natural, material, temporary, etc. resources into a product necessary for personal or social consumption.
Consider the features of labor as a factor of production:

Inability to create a stock;
The collective component is of great importance;
There is an improvement in labor in the production process through qualifications;
There are difficulties in moving in space;
There is a specificity issue.

Labor income is wages.
When entering the labor market, an individual makes two fundamental decisions:

How much labor service to offer?
Where to offer your work?

The solution to the first question can be presented as a choice between leisure and the consumption of goods and services.
In this case, the individual is faced with two effects:

Substitution effect - free time is replaced by workers to receive values \u200b\u200band services;
Income effect - free time becomes a more valuable boon.

When choosing, the individual is guided by real wages and
available unearned income.
Unearned income - income of an individual not related to work.
Unearned income includes:

Income of other family members;
Real estate income;
Income from financial investments;
Income from copyright and other non-property rights;
Benefits, pensions, other transfers, etc.

Nominal wages - the amount of money received by an individual for the provision of labor services.
Real wages - the amount of goods and services purchased at nominal wages.
When analyzing the behavior of individuals in the labor market, one often considers reserve wages, that is, the minimum wage for which an individual is willing to provide labor services.
The solution to the second question is related to the consideration of differences in the level of wages.
Differentiation of wages includes two points:

Differentiation of wages of workers of various professions;
Differentiation of wages of employees of one profession.

Along with the concept of "production resources" in the economic literature, the concept of "factors of production" is used.

What is common and what are the differences between these concepts?

The common thing is that both resources and factors are the same natural and social forces with the help of which production is carried out. The differences are that the resourcesinclude natural and social forces, who may be involved in productionand to factors - strength, really involved in the production process... Consequently, the concept of "resources" is broader than the concept of "factors".

In economic theory, you can find various approaches to the classification of factors of production. IN marxist theory distinguishes three factors: labor, subject and means of labor. Sometimes they will be formed into groups and personal and material factors are distinguished. The personal factor includes labor, which is a combination of physical and spiritual abilities of a person, which are used in the production process; to the material - objects and means of labor, which together make up the means of production.

It is generally recognized in economic theory that the factors of production are divided into three classical main types: land, capital, labor..

Land as a factor of production means all used in production process natural resources. It can be used for agricultural production, building houses, cities, railways etc. The earth is indestructible and non-multiplying, but it is subject to rather strong destruction due to predatory use, poisoning or erosion.

Capital in a broad sense, it is everything that can generate income, or resources created by people for the production of goods and services. In a narrower sense, it is an invested, working source of income in the form of labor-made means of production ( physical capital). The capital can be increased to any size.

Work- conscious, energy-consuming, social, expedient human activity, requiring the application of mental and physical efforts in the process of creating material goods and services, realized through the person himself. Labor as a factor of production is being improved thanks to the training of workers and their acquisition of production experience. The factor "labor" also includes entrepreneurial ability as a special factor of production.

Entrepreneurship - This is a specific factor of production (in comparison with land, capital, labor). The specificity lies in the fact that the subject business activities - an entrepreneur - is able to connect in a special way, combine factors of production on an innovative risk basis. Hence, the personal qualities of an entrepreneur are of particular importance.

At the present stage of the development of human society, such independent factors of production as science, information and time are of particular importance.

Science as a factor of production is associated with the search, research, experiments in order to expand existing and obtain new knowledge, to establish patterns that appear in nature and society, with the development and implementation of new equipment and technology in production. In modern economic theory, scientific achievements performed in economics are usually called innovations.

Information as a factor of production represents information, data that are stored, processed and used in the process of analysis and development of economic decisions in management.

Time is a limited and irreplaceable resource. Everything takes place in space and time. Saving time is the most important source of improving human life. It is fair to say that all savings ultimately boil down to time savings.

Resources (factors) of production, their classification and characteristics

The source of any production is resources , those. a set of natural, social and spiritual elements in the production of goods, services and other values. Resources are diverse in their composition, it is customary to subdivide them into four groups: natural, labor, material, financial.

Natural resources constitute the natural basis for the production of material goods. Natural resources include: land, its subsoil, forests, water, air. Humanity uses solar energy, the energy of the ebb and flow, the resources of the animal world, minerals, etc. Some of these resources are not renewable (oil, gas, coal, ore), while others are renewable. So, for example, through effective agronomic measures, it is possible not only to restore, but also to improve soil fertility.

Labor resources - This is an economically active part of the population of the country, possessing the physical and spiritual abilities to participate in labor activities. Quality requirements are increasing in a market economy labor resources: to their knowledge, educational level, professional training, health.

Material resources societies are a set of objects with which production is carried out. They represent the main part production capacity society. Material resources include buildings, structures, machines, machine tools, mechanisms, stocks of raw materials and materials, roads, bridges, communications, etc. Material resources are sometimes characterized as investment resources or means of production ... They consist of instruments of labor and objects of labor or what is described by the concept « capital».

Natural, labor and material resources are basic resources. They form a prerequisite for any, even the simplest production.

Financial resources are, in a sense, derivatives with respect to the underlying resources. These are foreign exchange reserves and reserves of precious metals, money savings of households and enterprises.

A special role in transition economy plays such a resource as information , which is presented in the form of scientific, technological, design, statistical, management information.

An important economic resource in a market economy is time ... Economic actors in their economic activity have a limited amount of this non-renewable resource. The problem of time is manifested in the existence of time constraints for every economic action.

Among economic resources, one should single out exhaustible and inexhaustible, reproducible and non-reproducible, as well as alternative and non-alternative resources.

Any production, regardless of the economic system in which it is carried out, consists in the consumption of economic resources. That part of economic resources that is directly involved in the production process and is used as its conditions is usually called factors of production ... In terms of volume, economic resources are always larger than the actually used factors of production, and economic actors never set the task of drawing all available economic resources into the sphere of production. Thus, the concept of "economic resources" is broader than "factors of production".

In economic theory, you can find different approaches to the classification of production factors. In Marxist theory, three factors are distinguished: labor, object and means of labor. Sometimes they are formed into groups and personal and material factors are distinguished. The personal factor includes labor, which is a combination of physical and spiritual abilities of a person, which are used in the production process; to the material - objects and means of labor, which together make up the means of production.

It is generally accepted in economic theory to distinguish three classical types of factors of production: land, labor, capital.

Earth in the meaning of a factor of production, it is interpreted: 1) as natural resources of all types involved in production, 2) as the land itself - a natural most important resource.

Work as a factor of production is an activity associated with the expenditure of human capital (a set of intellectual, professional, physical, mental and other human abilities) and aimed at the production of material goods and the provision of services.

Capital acts as a set of heterogeneous and reproducible resources, the use of which in the production process makes it possible to increase labor productivity. The capital structure is made up of equipment, intermediate product, money, securities.

The classification of factors of production, which is the basis of the modern theory of production, belongs to J.-B. Sayu, which proceeded from a known position A. Smith about three types of income: rent from land, wages for labor, profit on capital. Smithexplained the origin of these types of income by labor savings or by an increase in labor productivity. According to J.-B. Sayu, each of the factors of production generates a corresponding income.

IN modern conditions production as a special factor stands out entrepreneurship ... This is a kind of labor, which is characterized by high organizational skills, high level qualifications, innovation, entrepreneurial risk. This type of activity involves entrepreneurial ability as a special type of human capital. It consists in the effective combination of factors of production to create goods and services that generate income for all participants in the enterprise and satisfy social needs.

In economic theory postindustrial society additionally allocate information and environmental resources (factors) (Figure 2.3.1.).

Technology- man-made methods of influencing resources in the production process, expanding the possibilities of using their properties.

Energy- a driving force that transforms natural resources to create goods and services.

Information resource - search, collection, processing, storage and dissemination of useful information necessary for human production activities.

Ecology- human interaction with the environment... None of the named resources individually can produce a product and generate income, therefore their interaction is the production process. In the creative production process, raw materials, fuel, materials are consumed (consumed), i.e. production consumption takes place.

FORMS OF PROPERTY

The type of property, which differs in the nature of the subject of ownership, forms form of ownership.
Based on this, the following are distinguished forms of ownership.
1. Individual form of ownership.In this form, it is characteristic for an individual natural person to have the right to dispose of the object in his ownership by law, that is, the owner precisely determines what belongs to him. Depending on how the object is used individual property is subdivided into:
1) personal;
2) private.
There are two approaches to distinguishing personal from private property. The first is that the objects of individual property are subject to complete coverage of personal property. They are used and consumed by the owner himself or given free of charge for use by various other persons. Objects of individual property, which are provided to others for use for a contractual fee, are recognized as private property. The above characteristic is inherent in property objects in the form of consumer goods and property. The second assumes that the coverage of objects of individual property is carried out by means of hired labor. In this case, personal property is carried out with the help of one's own labor. ^ This definition is characteristic of individual ownership of the means of production. Based on these definitions, it is impossible to give an unambiguous concept of the delimitation of personal from private property. This is due to the fact that the above forms of ownership depend on the way of using the object, its application and consumption.
As a result of the transition of the Russian economy to a market economy, society began to treat private property with special fear, which is characterized by a lack of understanding of its essence and necessity, as well as the psychology of attitude towards it.
2. Collective ownership.
Within the boundaries of this form, the subject of ownership is a general set of owners. In this case, the subject of ownership has the right to act in the form of one authorized person or several persons who represent the interests of the entire team, most often in practice as one legal entity, enterprise, company or public organization.
The above forms characterize larger structures of various forms, which encompass a larger set of them. In our country, the following main forms of ownership are distinguished:
1) private;
2) state;
3) municipal.
At the same time, the property of individuals (individual property) and legal entities is also separated.
Is property government agencies power involved in social production, as a result of this it cannot belong to others on equal terms. In other words, these are natural resources, basic and working capital, information that is part of the property of the entire people, transferred at their request and decision of the highest authorities of society at the disposal and storage of state authorities.
Municipal propertyIs property held by local authorities.
In addition to all the listed forms of ownership, the following types are distinguished on a larger scale property:
1) the nationwide, represented in the form of the wealth of nature, intended for nationwide use with equal access for the entire population;
2) regional state, that is, property at the disposal and storage of state regional bodies;
3) property public organizations;
4) group and family property.

In the course of reforming property in the Republic of Belarus, the following basic and derivative forms and types of property have developed, enshrined in the Civil Code of the Republic of Belarus:

1) state property

· Republican;

· Communal;

2) private property

· Individuals;

· Non-state legal entities;

3) common property

· Joint;

· Share.

State property functions as republican (owner - Republic of Belarus) or communal (owners are administrative-territorial units). It includes state-owned enterprises and institutions based on the property of the Republic of Belarus and the property of administrative-territorial units that operate in the Organizational form of unitary enterprises.

Privateproperty in Belarus can function as individual property, i.e. individual property (natural person).The latter has the right to own objects of property, to carry out activities as individual entrepreneur or within the peasant farms. Collective private property in our country functions in the organizational and legal forms of activity of limited liability companies, additional liability companies, business partnerships and production cooperatives, closed and open joint stock companies.

Common property (family, collective) in the republic there may be share and joint . In addition, the functioning of mixed forms and types of ownership (public and private) is allowed.

Unlike the American one, the European economic model can be defined as a social market economy. Significant contribution to theoretical development such a model was introduced by representatives of the Freiburg economic school V. Euken, A. Müller-Armak, F. Boehm, V. Repke, L. Miks. They formulated the main characteristics of the social market economy model.

First, the indisputable necessity of the existence of a market and free pricing as a mechanism for economic coordination of consumers and producers was assumed. It was not the question "Market or planned economy, capitalism or socialism?" That was considered fundamental, but the question "What capitalism?"

Secondly, economic freedom was viewed in this model as a value in itself, and not as a tool for increasing market efficiency. Repke argued that even if socialism proved to be more efficient in producing goods than the market economy, the latter would still be preferable, because it provides citizens with personal freedom. In this regard, effective competition policy is one of the pillars of the social market economy.

Third, the theory of the social market economy differs from the older concepts of a free society in that it recognizes social issues a matter of government regulation.

Fourth, the supporters of this theory believed that only state regulation of the economy can resist the negative external effects of the market process (market fiasco). But the concept of a social market economy also recognizes the fact that state failures (state fiasco) in regulating market failures can occur as often as market failures.

The following main institutions of the social market economy are distinguished:

* support of a competitive environment (which is primarily a function of government bodies), which prevents the emergence of monopolies, which are the result of restrictions on trade, price fixing, the issuance of government acts and the manifestation of other barriers that restrict freedom of entry to and exit from the market;

* liberalization of prices and legislative registration of state non-interference in pricing mechanisms (if such interference is not associated with the maintenance and development of a competitive environment);

* pursuing an "open economy" policy. Rejection of such a policy leads to the development of monopoly tendencies, does not allow taking advantage of the international division of labor;

* legalization of effective forms of ownership, transition to a variety of forms of ownership and management;

* freedom to conclude contracts as a prerequisite for competition.

Japan, stormy developing after the Second World War, has accumulated sharply specific features of market development, which makes it possible to single out the so-called Japanese economic model. Like the American one, it reflects the peculiarities of historical development and national mentality. Reforming the post-war economy of Japan was carried out according to American liberal patterns, but national features of development very quickly emerged. There is no doubt about the market nature of the Japanese economy. Private property is of fundamental importance here, and the role of the state, if measured by its share of state property or the size state budget relative to gross domestic product is extremely insignificant. However, it would be a mistake to classify the Japanese model as liberal. Japan is a rather closed country with centuries-old traditions, including a significant interdependence of citizens, related by family, property, corporate and other ties. While formally remaining independent, economic entities attach great importance to interaction with their partners, competitors, and other entities. State regulation in such conditions takes the form of mostly not direct instructions, but advice, recommendations, consultations, to which the subjects carefully listen.

In principle, the Chinese model cannot be classified as a model based entirely on market principles. It is a mixed economy dominated by socialist principles of state regulation. A rapid inflow of foreign investment, the development of private property and market relations - all this is characteristic of China. However, the developed state machineregulating most of the processes of economic activity. This country is characterized by significant regional differentiation: in some regions new market enterprises are developing, while others still live in a socialist regime. Enclaves like Hong Kong function quite separately, and even the entry of citizens into their territory is limited. At the same time, China is developing towards a market economy, albeit in a specific version.

Belarusian economic model officially described as a model with a socially oriented market economy. This indicates its similarity with the model of the economies of developed European countries. However, it should be borne in mind that while economic system Belarus is in the process of transformation.

The course towards building a social market economy in Belarus in its content should not be interpreted as a return to a command-administrative economy. It presupposes the creation of effective institutions and mechanisms of a market economy that would allow successfully solving social problems. Economic policy in a social market economy is a policy of strengthening competitive market mechanisms and regulating market fiasco.

Non-price factors.

For measuring supply elasticity also expect price elasticity coefficient ... The price elasticity coefficient is the ratio of the change in the price of a given product in percent to the change in the value of the offer in percent

If the coefficient<1, то предложение эластичное, если >1, then inelastic, and if \u003d 1, then the supply and price changes occur at the same level.

In addition to price elasticity, one can similarly calculate the change in the elasticity of supply under the influence of changes in: prices for other goods, technologies, interest rates, taxes, etc.

The main factors that determine the amount of supply, are:

· Sales volume in actual selling prices (total revenue);

· Economic situation;

· Competition;

· tax policy;

· Trade.

Figure: 10.1.1. Business cycle phases.

The crisis is getting worse disorder of the financial sector of the economy : enterprises experience an acute shortage of money for payments and repayment of credit obligations to banks, their accounts payable are increasing. As a result, the bank loan interest increases. The crisis phase occupies a special place in the economic cycle. A crisis situation always testifies to the end of the period of successful economic development and the onset of a new period, characterized by the aggravation of all economic contradictions and the destabilization of the entire national economy or its individual spheres and industries. It is considered that crises separate one cycle of economic development from another.

There are the following types of crises . Structural crisis covers, as a rule, several economic cycles and is caused by the need to restructure the structure of production on a new technical and technological basis. Cyclical crisis represents periodically recurring recessions in national production, affecting all sectors and spheres of the national economy. Partial crisis affects a separate sphere or branch of the economy and can occur against the background of one of the structural components of the economic cycle (in the recession phase or in the recovery phase). Industry crisis concerns a specific branch of the national economy. Intermediate crisis has a local character and arises when the steady growth of national production due to economic miscalculations or the influence of external circumstances is suddenly temporarily slowed down, and the pace of development is noticeably reduced. World crisis manifests itself as an economic crisis affecting the development of most of the largest countries in the world, acting as a crisis in the world economy.

The crisis is followed by depression , which is characterized by the fact that after a certain time commodity stocks are absorbed at reduced prices, their further decline is suspended. This circumstance leads to the termination of numerous bankruptcies, the level of production no longer decreases. For some time the economy is in a state of stagnation. To get out of it, enterprises are trying to reduce prices, for which they seek opportunities to reduce production costs. In this case, the renewal of fixed capital is of particular importance. As a result, the demand for highly productive and economical to operate production equipment is growing, which is an incentive for industries producing such means of production, and then to revive the entire national economy.

Revitalization - the third phase of the business cycle. At that time the level of production and employment begin to rise, and the incomes and demand of the population are growing. As a result of this, and also because of the reduction of production costs by enterprises and an increase in profits, their demand for money for further renewal and expansion of production increases. In response, banks are willingly expanding lending to new investment projects, which leads to an increase in loan interest and a revival of the monetary sphere. The indicators of economic development reach the pre-crisis level, after which the fourth phase of the cycle begins - the rise.

Rise characterized by further an increase in production and employment, an increase in investment activity of enterprises. The incomes of the population are increasing, as a result of which consumer spending is growing. At the same time, prices and profitability of production rise, and unemployment is reduced to a minimum. This state of the economy continues until it reaches the highest development indicators, that is, up to peak where production is usually much higher than the start of the cycle ... Then the phases of the cycle are repeated over and over again.

Currently allocate three types of economic cycles depending on the reasons for the occurrence and the timing of the duration:

1. Short-term cycles lasting 3-4 years, called kitchin cycles ... Their reasons are associated with fluctuations in world gold reserves, as well as patterns of monetary circulation.

2. Medium term cycles lasting 10–20 years. The reasons for these cycles are depreciation and frequency of renewal of fixed capital, violation of the mechanism of functioning of the credit sphere. (Zhuglar cycles), as well as periodic renovation of production facilities and housing (the so-called Kuznets construction cycles).

3. Long-term cycles (large economic kondratieff cycles ) lasting 48–55 years. Their reasons are the cyclical development of scientific and technological progress and the dynamics of the use of innovations.

Despite the fact that various types of economic cycles are characterized by certain specificities, they also have common features, manifested in the following:

· Short-term, medium-term and long-term cycles of economic development do not oppose one another, but interact and complement each other;

· The main mechanism of short-term, medium-term and long-term fluctuations is scientific and technological progress;

· Short-term, medium-term and long-term cycles have a relatively synchronous form of movement and form a world cycle;

· Short cycles are part of medium cycles, and the latter are part of long cycles of economic development.

Business cycles serve two main functions. First, destructive associated with the breakdown, destructive elimination of the existing abnormal proportions of production, and the second, wellness, - with the renewal of fixed capital and, as a result, access to new, higher levels of production.

As for modern economic cycles , then they are characterized by features, which boil down to the following:

· Thanks to the regulatory activity of the state, economic cycles have become less deep and less long: their duration has decreased from 10-12 years at the end of the 19th century. - the first half of the XX century. up to 5–7 years old now;

Earlier, the phases of the cycle in different countries occurred in different time... The cycle is now synchronized, and its phases begin in most countries almost simultaneously;

Due to the countercyclical government regulation the boundaries between the individual phases of the cycle have become more blurred, less clear, and the phases of the cycle smoothly transition one into another;

· From the beginning of the 70s of the XX century. the economic cycle is inherent stagflation (simultaneous growth of inflation and unemployment) against the background stagnation (stagnation in production).

Fig 11.1.1. Aggregate demand curve.

Non-price factors shift the aggregate demand curve itselfeither to the right when it increases, or to the left when it decreases under their influence.

Consumption and savings

Aggregate demand largely depends on the total spending of the population on the purchase of consumer goods and services, or aggregate consumption ... These costs represent the main (about 2/3) part of aggregate demand. The rest comes from investment, government spending and net exports. From the point of view of Keynesian theory, the higher the consumption, the greater the volume of national production and national income.

Consumption depends on objective and subjective factors. The main objective factor that determines the level of consumption , is an disposable income ... It represents the funds remaining with the population after paying taxes to the state and used by them at their own discretion. A significant part of it is spent on the purchase of goods and services necessary to meet the needs, forming consumer spending.

Figure: 12.2.1. Consumption function.

The volume of consumption is directly dependent on the amount of disposable income: the higher the income, the more funds can be spent on consumption. The relationship between consumption and disposable income is called consumption function ... It can be depicted graphically (Fig. 12.2.1.).

In this figure, the situation where all disposable income is spent on consumption is shown as the bisector of the angle of origin. Any point located on it reflects the fact of equality of disposable income and consumption expenditures. Thus, the bisector represents an equilibrium segment of consumption. However, in practice, the relationship between incomes of the population and consumption expenditures may differ significantly from the equilibrium line, which in this case changes its configuration and turns into a real segment of consumption that originates from some minimum level of autonomous consumption.

Autonomous consumption () arises when current income is zero or insufficient, but consumption is carried out at the expense of previously accumulated funds, sale of property or "getting into debt." Consequently, part of consumption does not depend on the amount of disposable income. In this case, the distance between the income axis and the real consumption curve expresses the actual consumption.

The main subjective factor of consumption is the psychological propensity to consume, which can be medium and extreme. Average propensity to consume ( ) is determined by the percentage of consumption () to disposable income ():

The average propensity to consume gives an idea of \u200b\u200bhow much of the disposable income has been used for consumption.

Marginal propensity to consume () expressed by the ratio of the change in consumption () to the change in income due to which it occurred ():

Marginal propensity to consume shows how much of the additional income is spent on increasing consumption.

Graphically, the marginal propensity to consume determines the slope of the consumption function: the larger it is, the greater the slope of the consumption segment and the steeper it is. Thus, in a formalized form, the consumption function can be represented in the following form:

where is autonomous consumption;

Marginal propensity to consume;

Disposable income.

The quantity always fluctuates between 0 and 1. If = 0, then the entire increase in income goes to consumption. In the case when = 1, the entire increase in income is channeled into savings.

Saving Is that part of disposable income which is not currently consumed but intended to meet future needs. Therefore, savings () represent the difference between disposable income () and consumer spending ():

Savings motives population can be:

· Purchase of real estate;

· Purchase of high-value goods and tourism;

· Provision in old age;

· Insurance against unforeseen circumstances (illness, accident, etc.);

· Providing for children in the future.

Like aggregate consumption, cumulative savings depend on objective and subjective factors. The main objective factor is disposable income , representing the sum of consumption and savings. Consequently, the larger it is, the more opportunities for savings. This dependence is expressed savings function , which is graphically depicted as follows (Fig. 12.2.2.).

Figure: 12.2.2. Savings function.

The figure shows that the curve representing the saving function is located above the axis of disposable income when there is savings, or below it if they are absent.

The main subjective factor of savings is the propensity to save, that is, the desire to save.

It is average and extreme. Average propensity to save () expressed as a percentage of the saved part of disposable income () to all disposable income ():

The average propensity to save gives an idea of \u200b\u200bhow much of the disposable income has been used to save.

In turn, marginal propensity to save () is determined by the ratio of any change in savings () to the change in disposable income () that caused it:

The marginal propensity to save measures how much of the additional income is spent on increasing savings.

Graphically, marginal propensity to save is the slope of the savings function curve. The larger it is, the greater this angle of inclination (the curve is steeper). In this regard, the formalized form of the savings function can be presented as follows:

where - - autonomous consumption;

Marginal propensity to save;

Disposable income.

A negative value of autonomous consumption () means that consumption expenditures exceed disposable income, lack of personal savings and living in debt.

If the total disposable income is split into total consumption and total savings, then the sum of the increase in total consumption and total savings is always equal to its increase. Consequently, + = 1. Hence = 1- , and = 1- .

The significance of savings is that if they are there, they can be consumed without getting into debt. This situation is called "Savings effect" ... As disposable income increases, the marginal propensity to consume tends to decrease, and the marginal propensity to save tends to grow.

Factors of production - the resources that must be expended to produce a product. These factors of production are labor and technology (human resources), land and capital (property resources). The following definitions of production factors have been adopted:
labor - physical and mental activity of a person, aimed at achieving a useful result;
technology - scientific methods of achieving practical goals, including entrepreneurial ability;
land - everything that nature has provided at the disposal of man for his production activities (land, minerals, water, air, forests, etc.);
capital - the accumulated stock of funds in productive, monetary and commodity forms, necessary to create material wealth.
Each of the factors of production has a price. The price of labor is wages, technology - license or patent payments, land - land rent, capital - bank interest. The price of a factor of production reflects the balance of supply and demand for it both within the framework of an individual state and in the relations of states with each other. Since the states modern world are endowed with separate factors of production to varying degrees, then their prices will be different. The statement that the price of land in Russia will be relatively low, and in Holland - relatively high, the price of labor in China - relatively low, and in Germany - relatively high, the price of capital in the USA - relatively low, and in Poland - relatively high, the price of technology in Japan is relatively low, and in Taiwan - relatively high.
If we imagine that the factors of production used to create a specific product are located both in their own country and abroad, then the simplest scheme of the economy will look like this (Figure 1.2). Legal entities (enterprises, businesses) produce goods and sell them to individuals (people, households). People pay businesses for their goods and bear the costs. At the same time, people sell to enterprises the factors of production they have - their labor, land, capital, technology, which are paid for by enterprises and form the income of the sellers of these factors. This is a primitive scheme of the national economy that does not take into account many important parameters, such as economic role states and interaction of the national ECONOMY with the outside world. If THIS last aspect is taken into account, then a few more very significant feedbacks should be added to the scheme, and the simplest scheme of the economy, including an international element, will be as follows. On the one hand, enterprises can sell their products not only domestically, but also abroad, for which they will receive payment from their foreign buyer. At the same time, an entrepreneur can hire foreign workers, rent land overseas, and build a business there. In this case, he will have to pay for the use of foreign factors of production. On the other hand, people have a choice of where to buy a product: whether domestically or abroad, importing it and bearing the cost of importing it. But at the same time, they can sell their factors of production abroad - rent land to a foreigner, get a job abroad, or allow foreign investment in their enterprise - and receive income from this. This scheme, which is valid for almost every country in the world, clearly confirms that the modern economy is essentially international and is based on the division of factors of production between countries.

Along with the concept of "production resources" in the economic literature, the concept of "factors of production" is used.

What is common and what are the differences between these concepts?

It is generally recognized in economic theory that the factors of production are divided into three classical main types: land, capital, labor..

Land as a factor of production means all natural resources used in the production process. It can be used to produce agricultural products, build houses, cities, railways, etc. The earth is indestructible and non-multiplying, but it is subject to rather strong destruction due to predatory use, poisoning or erosion.

Entrepreneurship - This is a specific factor of production (in comparison with land, capital, labor). The specificity lies in the fact that the subject of entrepreneurial activity - the entrepreneur - is able to connect in a special way, combine the factors of production on an innovative risk basis. Hence, the personal qualities of an entrepreneur are of particular importance.

At the present stage of the development of human society, such independent factors of production as science, information and time are of particular importance.

Information as a factor of production represents information, data that are stored, processed and used in the process of analysis and development of economic decisions in management.

Topic 3: Perfect and Imperfect Competition

Depending on the ratio between the number of producers and the number of consumers, the following types of competitive structures are distinguished:

1. A large number of independent producers of some homogeneous product and the mass of isolated consumers of this product. The structure of ties is such that each consumer, in principle, can buy a product from any manufacturer, in accordance with his own assessment of the usefulness of the product, its price and his own possibilities of purchasing this product. Each manufacturer can sell a product to any consumer in accordance with his own benefit only. No consumer acquires any significant share of total demand. This structure market is called polypoly perfect competition.

2. A huge number of isolated consumers and a small number of producers, each of which can satisfy a significant share of total demand. This structure is called oligopoly, and gives rise to the so-called imperfect competition ... The limiting case of this structure, when the mass of consumers is confronted by the only producer capable of satisfying the total demand of all consumers, is monopoly. In the case when the market is represented by a relatively large number of manufacturers offering heterogeneous (heterogeneous) products, then they talk about monopolistic competition.

Let's consider in more detail the main of the above market structures.

1. Polypoly (perfect competition).A large number of buyers and sellers of the same product. Changes in the price of any seller elicit a corresponding reaction only among buyers and not among other sellers.

The market is open to everyone. Advertising campaigns are not so important and obligatory as only homogeneous (homogeneous) goods are offered for sale, the market is transparent and there are no preferences. In a market with a similar structure, price is a given value.

Although the price is formed in the process of competition among all market participants, at the same time, a single seller does not have any direct influence on the price. If the seller asks for a higher price, all buyers immediately go to his competitors, since in the conditions perfect competition each seller and buyer has complete and correct information about price, product quantities, costs and market demand

If the seller asks for a lower price, then he will not be able to meet all the demand that will be focused on him, due to his insignificant market share, while this particular seller does not directly influence the price.

If buyers and sellers do the same, they influence the price.

If the seller is forced to accept the prevailing prices in the market, then he can adjust to the market by regulating the volume of his sales. In this case, he determines the quantity that he intends to sell at a given price. The buyer also only has to choose how much he wants to get at a given price.

Perfect competition conditions are determined by the following prerequisites:

A large number of sellers and buyers, none of which has a noticeable effect on the market price and quantity of goods;

Each seller produces a homogeneous product that is in no way distinguishable from the product of other sellers;

Barriers to market entry in the long term are either minimal or nonexistent;

There are no artificial constraints on demand, supply or price, and resources — variable factors of production — are mobile;

Each seller and buyer has complete and correct information about the price, product quantities, costs and market demand.

It is easy to see that no real market satisfies all of the above conditions. Therefore, the scheme of perfect competition has mainly theoretical significance. However, it is the key to understanding more real market structures. And this is its value.

For market participants in perfect competition, the price is a given value. Therefore, the seller can only decide how much of the product he wants to offer at a given price. This means that he is both a price acceptor and a quantity regulator.

2. Monopoly. One seller is opposed to many buyers, and this seller is the only manufacturer of the product, which, moreover, does not have close substitutes. Such a model has the following characteristic features:

The seller is the only manufacturer of this product (product);

The marketed product is unique in the sense that there are no substitutes for it;

The monopolist has market power, controls prices, supplies to the market (the monopolist is the price legislator, i.e. the monopolist sets the price and the buyer, at a given monopoly price, can decide how much goods he can buy, but in most cases the monopolist cannot set an arbitrarily high the price, because as prices rise, demand decreases, and with falling prices, demand increases;

On the way of a monopolist's entry into the market, insurmountable barriers are set up for competitors, both natural and artificial. Examples of natural monopolies are public utilities such as electricity and gas companies, water companies, communications lines, and transport companies. Artificial barriers include patents and licenses granted to certain firms for the exclusive right to operate in a given market.

3. Monopolistic competition... A relatively large number of manufacturers offer similar but not identical products, i.e. there are heterogeneous products on the market. In conditions of perfect competition, firms produce standardized (homogeneous) products, in conditions of monopolistic competition, differentiated products are produced. Differentiation affects, first of all, the quality of the product or services, due to which the consumer develops price preferences. Products can also be differentiated according to the conditions of after-sales service (for durable goods), proximity to customers, advertising intensity, etc.

Thus, firms in the market of monopolistic competition enter into rivalry not only (and even not so much) through prices, but also through the worldwide differentiation of products and services. The monopoly in such a model is that each firm in terms of product differentiation possesses, to some extent, monopoly power over your product; it can raise and lower the price of it regardless of the actions of competitors, although this power is limited by the presence of producers of similar goods. In addition, in monopolistic markets, along with small and medium-sized, fairly large firms.

In this market model, firms tend to expand their preferences by customizing their products. This happens primarily through trademarks, names and advertising companythat uniquely highlight product differences.

Monopolistic competition differs from perfect polypoly in the following ways:

In a perfect market, not homogeneous but heterogeneous goods are sold;

There is no complete transparency of the market for market participants, and they do not always act in accordance with economic principles;

Businesses seek to expand their preferences by customizing their products;

Market access for new sellers in monopolistic competition is difficult due to preferences.

4 oligopolyA small number of participants in the competition - when a relatively small (within a dozen) number of firms dominates the market for goods or services. Examples of classic oligopoly: the "big three" in the United States - General Motors, Ford, Chrysler.

Oligopolies can produce both homogeneous and differentiated goods. Uniformity most often prevails in the markets of raw materials and semi-finished products: ore, oil, steel, cement, etc .; differentiation - in consumer goods markets.

Few firms contribute to their monopolistic agreements: by setting prices, dividing or distributing markets or by other means of limiting competition between them. It has been proved that the lower the level of concentration of production (the greater the number of firms), the more intense the competition in the oligopolistic market, and vice versa.

An important role in the nature of competitive relations in such a market is played by the volume and structure of that information about competitors and about the conditions of demand that firms have: the less such information, the more competitive the firm's behavior will be. The main difference between the oligopolistic market and the market of perfect competition is associated with price dynamics. If in a perfect market they pulsate continuously and haphazardly depending on fluctuations in supply and demand, then with oligopoly they tend to be stable and do not change so often. Typically so-called price leadershipwhen they are predominantly dictated by one leading firm, while the rest of the oligopolists follow the leader. Market access for new sellers is difficult. In the case of oligopolists' agreement on prices, competition is increasingly shifting towards quality, advertising and individualization.

Topic 4: Market infrastructure

Market infrastructure is a system of institutions and organizations that ensure the movement of goods, services, capital and labor in the market.

The organizational base of the market infrastructure includes supply and sales, brokerage and other intermediary organizations, commercial firms of large industrial enterprises.

The material base consists of transport, banking and insurance systems, large independent banking and savings and credit institutions, as well as medium and small commercial banks of various volumes of operations.

The most important elements of the market infrastructure are fairs, auctions, stock exchanges.

Fair means:

A regular market that is organized at a specific location;

Periodic trading place;

A seasonal sale of one or more types of goods.

Auctions dealing with products that are not enough on the market. The main guideline here is to get the maximum price for any product. The auction is a public sale of a product at a predetermined location. The goods sold go to the buyer who named the highest price. Distinguish between auctions compulsory, which are carried out by the judicial authorities in order to collect the debt of defaulters and voluntary, which are organized on the initiative of the owners of the goods being sold. To conduct auctions, special firms are created that work on a commission basis,

There are international auctions. They are a kind of public open biddingwhere goods of a certain nomenclature are sold: wool, tobacco, furs, tea, horses, flowers, fish, timber, as well as luxury goods, works of art.

Stock exchange is a meeting place for buyers and sellers, a place where deals are made. Distinguish between commodity exchanges, stock exchanges and labor exchanges.

Commodity exchanges operate in the markets for individual goods. Here, transactions for the sale of goods are carried out on the basis of preliminary inspection and according to samples and standards.

By their nature, exchange transactions are of two types: I) spot transactions- these are transactions for real goods. They provide guarantees for the sale of the product that is already in stock; 2) forward transactions, in which not the product itself is sold, but the right to receive it. A variety of forward transactions are futures transactions. The purpose of a futures transaction is to obtain the difference in price for the period between the conclusion of the contract and its execution.

On stock exchange there are mainly two types of circulation valuable papers: shares of enterprises, companies, firms; bonds issued by the country's government, local governments, utilities, and private companies.

Labor exchange - an organization specializing in the performance of intermediary operations between entrepreneurs and workers for the purchase and sale of labor.

The market infrastructure element is credit system... It includes banks, insurance companies, union foundations and any other organizations with the right commercial activities... The core of the credit system is the banking system.

The market infrastructure includes and public finance... They are based on central and local budgets. Through the state budget, there is a redistribution of income, financing of production and social programs.

A number of links in the market infrastructure are designed to serve the market economy as a whole. These are legal and information services, consulting companies, etc.

An important part of the market infrastructure is a ramified system of legislation that regulates the legal relationship of economic entities operating in the market.

Topic 5: Demand, Supply and Market Equilibrium

Factors of production and their classification by origin. The main factors of production. Production function and its factors

The last

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