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By division of labour we mean specialisation in work.  Under it the worker specialises either in the prouduction of a single commodity or single sub-process . It is a system whereby the operations necessary to make a finished product are so minutely divided that each worker performs one or at the most only a few operations. 

Types of division of labour: 

1 . Product based division of labour: When a worker specializes in the production of a particular commodity or service, it is called product based division of labour. 

2. Process Based division of labour:  in a modern economy, production of a good or service involves several processes and each worker specializes vin one or two processes. This type of division of labour is known as process based or complex division of labour. 

3. Geographical division of labour: Sometimes due to some reasons, the production of certain goods takes place in a particular place, state, or country This type of division of labour is called geographical division of labour. 

Factors of Production (FOP) 

Production of goods & services requires the use of certain resources. For eg : to produce whearc, a farmer needs land, labour, seeds, fertilizer, etc. So in this example land, labour, seeds and fertilizers are the factors of production. 

Characteristics of FOP: 

1. Jointly used in the production of a commodity: No single commodity can produce anything. We will have to combine all the factors together to produce something. 

2. Physical Existence: all the four factors of production have a physical existence. They are tangible resources. 

3. Use of factor services: An important characteristic of factors of production is that it is the services of the factors, rather than the factors itself, that contribute to production. 

4. All the factors are not equally mobile: Labour and entrepreneur are mobile factors of production, as they can be transferred from one place to another. On the other hand land is immobile. 

Classification s of FOP : 

1.Land : land is a basic factor of production, because in every type of productive avtity land is needed. It is also a passive factor because it has to be used by labour and entrepreneur, for producing something. 

2. Labour: Labour means all types of human work, physical and mental, done with a view to earn money. 

3. Capital : all man made durable goods, which are used for further production of wealth are included in capital. Capital is a produced means of production. 

4. Organisation : land, labour, and capital are natural, human and material means of production. No production is possible without bringing these factors of production together and using them in right proportions.  

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GDP is Gross Domestic Product. It is the total value of goods and services produced within the boundaries of a nation in a given time period. E.g. 1 year

The value of goods and services produced by both Indian and foreign National are taken into account.

GNP is the Gross National Product. Here the difference is the fact that boundary restriction is not there. However, the values produced by Indian national residing anywhere in the world is considered.

The basic economics is the study of, and the Economy is a process where people ears their livelihood.

Human being has unlimited wants; however, to fulfil those needs resources are limited.  So we have to choose short everyone has unlimited wants and income is low so it has to make a choice.  That is with every Economy, and this is known as the central problem of Economy as this problem arises with every Economy.

What to produce, how to build, and for whom to produce.

To solve these problems, PPC was invented.  PPC shows all the best possible combination of two goods that an economy can produce with the given resources and available technology.