Terminology

No	Term	Definition
1	Production	Transformation of factors inputs into outputs.
2	Primary Production	Deals with all forms of extraction of resources from the earth.
3	Secondary Production	Involves the transformation these extracted resources into finish product.
4	Tertiary Production	Involves those services that aid both primary and secondary production to be successful e.g. Banking.
5	Land	Any site economic activity takes place.
6	Labour	All human effort used in the production process.
7	Capital	Goods that are required in the production of other goods.
8	Entrepreneurs	Person that coordinates and organizes all other factors of production.
9	Short run	Period of time in production process in which at least one can be varied.
10	Production Function	The relationship between the quantities of inputs and the maximum quantities of outputs produced.
11	Return to Scale	Possible outcome of production process.

Terminology

No	Term	Definition
12	Total Product	Obtained as a result of employing unit of labour in the production process.
13	Average Product	Product per unit of labour employed.
14	Marginal Product	Charge in total product as a result of charge in the unit of labour.
15	Cost	Total amount of money incurred in the production process.
16	Explicit costs	Monetary opportunity cost to a firm of using resources supplied by the market.
17	Implicit costs	Opportunity costs of resources the firm's owner makes available for production with no direct cash outlays.