Household production is a critical concept in economics. Household activities are production process that involve the creation of goods and services to cater for family members’ needs. Notably, household production is essential in the transformation of basic commodities purchased from firms into useful products. Cooking is a household production activity and hiring other people to complete the action gives rise to opportunity costs.
As a production process cooking has inputs and steps are followed in the creation of the final output. Cooking inputs include groceries, spices; raw food substances like flour and rice purchased from stores; and water. The cooking process that involves the preparation and placing the cooking pot on fire is the transformative process of changing the input into the final product. The final output of the cooking process is edible foods that are consumed in the household.
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There is an opportunity cost of individual completion of the household production process and hiring another person to complete the task. Cooking is a time-consuming activity and the time can be used for other purposes like work to generate income. On the other hand, there is a cost of hiring another person to cook for the family. Therefore, the opportunity cost of household production is the difference between the household income that can be generated over the cooking period and the cost of hiring another individual for the production process.
Economies of scale affect household production. The economies of scale create an advantage for households, for example, when the number of people in a household increase allowing people to purchase products in bulk. As a result of the bulk purchases, cost advantages are realized and the production level increases. Therefore, economies of scale significantly increase the rate of household production resulting in higher satisfaction levels for the stakeholders.
