Civil Engineering Reference
In-Depth Information
Key Points 1.1
❍
The construction industry can be described in a number of ways - for
example, review the broad range of activities listed in
Table 1.1
(page 1).
❍
Construction has five distinguishing characteristics: (a) each project is
regarded as a unique one-off product; (b) the industry is dominated by a
large number of relatively small firms; (c) the general state of the economy
influences demand; (d) prices are determined by tendering; and (e) projects
are characterised by their 'lumpiness' in terms of their scale and expense.
❍
The basis of economics rotates around the concepts of choice, scarcity and
opportunity cost. Hence, economics is the study of how we make choices.
❍
Any use of a resource involves an opportunity cost because an alternative
use is sacrificed.
❍
The graphic representation of the trade-offs that must be made can be
displayed in a production possibility curve.
❍
Sustainable construction is a strategy aimed to encourage the industry
to (a) use resources more efficiently, (b) limit the environmental impact
of its activities, and (c) produce buildings and infrastructure that benefit
everyone.
INTRODUCING ECONOMIC VOCABULARY
The discipline of economics employs its own particular methodology and language.
Consequently for the complete beginner it is necessary at the outset to clarify a few
meanings.
Resources
Resources can be defined as the inputs used in the production of those things that
we desire. Economists tend to refer to these resources as
factors of production
to
highlight the fact that only by combining various factors can goods and services
be produced. The factors of production are usually categorised into three general
groups; namely, land, capital and labour - and sometimes the entrepreneur is
specifically identified as a fourth entity. The point is that quantities of each factor
are needed to make any good or service. To construct buildings or infrastructure,
for example, labour is required to develop a plot of land, and plant and equipment,
which may be hired or bought, is required to facilitate the process. To put it another
way, land and labour are always combined with manufactured resources in order to
produce the things that we desire. The manufactured resources are called
capital
, or
more precisely physical capital, and consist of machines and tools.
The contribution of labour to the production process can be increased.
Whenever potential labourers undergo training and learn new skills, their
