economic output

Examples of economic output in the following topics:

• Explaining Fluctuations in Output

  • In economics, output is the quantity of goods and services produced in a given time period.
  • For this reason, understanding the fluctuations in economic output is critical for long term growth.
  • There are a series of factors that influence fluctuations in economic output including increases in growth and inputs in factors of production.
  • Anything that causes labor, capital, or efficiency to go up or down results in fluctuations in economic output.
  • This AS-AD model shows how the aggregate supply and aggregate demand are graphed to show economic output.

• Growth in the Rest of the World

  • The economic output expanded for 122 countries and contracted for 29.
  • The economic output for 176 countries expanded and four contracted.
  • Economic output expanded in 171 countries, but 11 countries experienced output contractions.
  • The economic output of 127 countries contracted.
  • The global economic output is expected to expand by $32.9 trillion.

• Other Factors of Production

  • There are three factors of production that are required to produce economic output: land, labor, and capital.
  • Finished goods are the output.
  • Input determines the quantity of output; in other words, output depends upon input.
  • Input is the starting point and output is the end point of a production process and such input-output relationship is called a production function.
  • In economics, production means creation or an addition of utility.

• Relationship Between Output and Revenue

  • In economics, output is defined as the quantity of goods or services produced in a certain period of time by a firm, industry, or country.
  • Output can be consumed or used for further production.
  • Output is important on a business and national scale because it is output, not large sums of money, that makes a company or country wealthy.
  • Krispy Kreme's output is donuts.
  • It generates revenue by selling its output.

• Production Outputs

  • A firm's production outputs are what it creates using its resources: goods or services.
  • In economic theory, the profit-maximizing amount of output in occurs when the marginal cost of producing another unit equals the marginal revenue received from selling that unit .
  • Economic Profit: The firm's average total cost is less than the price of each additional product at the profit-maximizing output.
  • The economic profit is equal to the quantity output multiplied by the difference between the average total cost and the price.
  • In this case, the economic profit equals zero.

• Total Factor Productivity

  • Instead, it is a residual which accounts for effects on total output not caused by inputs.
  • In the equation above, Y represents total output, K represents capital input, L represents labor input, and alpha and beta are the two inputs' respective shares of output.
  • An increase in K or L will lead to an increase in output.
  • It is also generally viewed as one of the main vehicles for driving economic growth.
  • When a country is able to increase its total factor productivity, it can yield higher output with the same resources, and therefore drive economic growth.

• National Income

  • A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region.
  • A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted national income (NNI* adjusted for natural resource depletion).
  • The value that the measures of national income and output assign to a good or service is its market value – the price when bought or sold.
  • The output approach focuses on finding the total output of a nation by directly finding the total value of all goods and services a nation produces:
  • The income approach equates the total output of a nation to the total factor income received by residents or citizens of the nation:

• Economic Growth as a Measuring Stick

  • Economic growth can be defined as the increase in real gross domestic product (GDP) in the long-run, or as increased productivity or via an increase in the natural resources (inputs) that create output.
  • It is important to note that real GDP adjusts for inflation, rather than looking at output in nominal dollars.
  • $Y=f(K,L,N)$, where Y, K, L and N represent output, capital, labor and land respectively.
  • Salter Cycle: Economic growth is ultimately enabled by increases in productivity, and thus reductions in the required inputs to achieve each subsequent output per unit.
  • A more educated workforce will result in increases in real output, as will advances in technology and innovation.

• Defining the Production Function

  • The production function relates the maximum amount of output that can be obtained from a given number of inputs.
  • In economics, a production function relates physical output of a production process to physical inputs or factors of production.
  • This production function says that a firm can produce one unit of output for every unit of capital or labor it employs.
  • For example, the firm could produce 25 units of output by using 25 units of capital and 25 of labor, or it could produce the same 25 units of output with 125 units of labor and only one unit of capital.
  • For example, a firm with five employees will produce five units of output as long as it has at least five units of capital.

• Aggregate Production

  • Production functions assume that the maximum output is attainable from a given set on inputs.
  • Stage 1: the variable input is being used with increasing output per unit.
  • The optimum input/output combination will be reached.
  • The output of both fixed and variable input declines.
  • Aggregate production functions study the short-run inputs and outputs of a firm or economy.