How much effort and money must be spent to produce 1 dollar?

Let's look at the example of a mango.<br><br>Let's say you are a mango cultivator, and your salary is 1000 dollars per month.<br><br>You pay your salary of 1000 dollars. <br><br>When this money is received by you salary (you), then a portion of it is going to be used to produce goods and services. A portion of it is going to be used to create new goods, while the rest will be used to buy things that you need to live (food,etc). Essentially your salary goes into two different pockets, production and consumption.<br><br>Now let's say you cultivate 100 mangos and sell them to someone for 5 dollars. To cultivate 100 mangos you may have spent 100 dollars on fertilizers and other goods, say securyry systems and what not. <br><br>Then if you subtract the amount you spent on goods, then your profit is 5 - 100 dollars, which is negative. <br><br>Now, you must make a living somehow, so you may have spent 100 dollars to produce 5 dollars, but you also spent some of your salary on things that you needed to live. In other words you say "Oh I need to buy 100 dollars worth of food because I need to live".<br><br>In other words you take the 1000 dollars you earned, but then subtract 100 dollars because you need to live, and after you have decided to live you then have spent 900 dollars to produce 5 dollars. <br><br>In other words 900/5 = 180. For every dollar you produce you have spent 180 dollars.<br><br>But then you also have to take into account that there is a cost for you to live, so now we have a formula<br><br>Cost_of_living/Cost_of_production_cost_for_5_dollar_widget = (900 + 100)/5 = 200<br><br>So let's look at a different example using the same formula.<br><br>Cost_of_living/Cost_of_production_cost_for_5_dollar_widget = (4000 + 600)/5 = 2000.<br><br>So, what are you doing here? You are taking the money you earned, and then you are buying a house to live in. And then you are building a factory to produce the widgets. In other words you may be producing 2000 widgets costing 1 dollar each, and each widget costs 1 dollar to make, so your profit is 0. But you want to take home some money, so you may jack up the price by 2x to get a profit of 1 dollar per widget.<br><br>So, you are producing 2000 widgets, costing 2000 dollars to make, you are paying yourself 4000 to get a salary, and you are selling 2000 widgets at 2 dollars each for 4000 dollars, and you are taking home 4000 per month.<br><br>That is what having a business is like.