Rostow’s theory looked at the country’s economic development as a process of gradual change and form a straight line. According to Rostow, the development of the country can be divided into five stages.

a. Phase traditional economy
At this stage the economy is still oriented to the effort to meet their own needs. Application of technology and management is still very low so that its productivity is still low.

b. Pre-takeoff
Traditional societies though very slowly, constantly moving and at one point reaching a precondition for takeoff. This situation usually occurs because of interference from outside, ie from a more advanced society.
This stage is a transition period when people reach the stage of preparing for takeoff. Prerequisites that must be met to be able to take off is the presence of considerable changes in fundamental economic, political, social, cultural, and value systems. During this transition period is essential to succeed in the takeoff stage.

c. Phase takeoff
Take-off stage is the stage when the economy is able to grow and evolve with its own power. At this stage the application of modern management technology and more extensive and intensive. In addition, a drastic change in the social and political as well as the creation of rapid economic progress due to innovations and the opening of new markets. All that can increase the rate of investment which further accelerate the growth of national income over the rate of population.

d. Stage of maturity
This stage is a period when society was effectively using modern technology in most of the factors of production and natural wealth. At this time of rapidly growing sectors of the economy and leading industry suffered a setback, but was replaced by other sectors. Economic growth is not as high off the stage, but offset by the growth of qualitative matters so that the economy is getting stronger and independent. After takeoff the progress will continue to move despite the occasional ups and downs. Industry grew rapidly and began to produce goods previously imported.

e. Stage of mass consumption of high levels
At this stage the level of public consumption is very high, especially energy consumption. It can be seen in the lives of Western Europe, North America, and Japan.
The characteristics of this stage are:
- The labor force has a better warranty.
- Providing food for people who increasingly inadequate.
- State seeking the expansion of power in the eyes of the world.
Because of rising incomes, consumption is no longer limited to basic needs, but increased in the higher needs. At this stage are the traits of an ideal mass when people live comfortably so that there is a tendency to increase the number of families and the population will increase.

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Efforts seen from the development of human civilization, among others:
a. Using the natural surrounding environment by:
1. hunt
2. catch fish, using simple tools
3. picking the fruit, leaves tubers and so forth.
In this era called the era of wandering (nomadic) and it turns out, people still do not meet the needs of all.

b. Commercialize natural way:
1. cultivate the land
2. water use
3. using herbs
4. using animal power, solar thermal and other tools.
This era is called the agricultural “green revolution”.

c. Although the existence of a new civilization, but there’s still rare that a tool or technology, so that the resulting exchange or barter and trade eventually. If the device needs no human was in place, then people look for somewhere else, other regions and even other countries.
You do this by:
1. barter
2. exchanged for money
3. processed
4. stored
5. imitated.
Due to the scarcity of sharing dwindle due to new discoveries with the “industrial revolution”.

d. Trying to do together
Realized because of the limited ability of human, thoughts, actions, and its reach, need the help of others. The results obtained with the joint venture will be much more than the business itself. The results obtained were jointly strived to improve the welfare of his life, prosperity can be achieved, eliminate hunger, squalor, poverty. All the necessities of life could be available for today, tomorrow and the future can be calculated. Therefore, the interdependence between human beings, need cooperation between countries, need to increase prosperity, and realize a shared responsibility. In fact, thanks to advances in technology, now called the era “communication”, as if the world is more narrow and fused.

Scarcity or limited economic resources include:
a. Natural resources, raw materials are lacking, for example, Japan does not have abundant natural resources (eg petroleum, natural rubber). Nature Indonesia is a rich, contains many natural resources, there are still many who have not been optimally utilized to meet human needs in Indonesia, due to lack of technology and expertise. Java Island is the most populous among the other islands in Indonesia, causing limitations on land issues. It is necessary to search for arable land outside Java, for example:
1. land in the fertile island of Sumatra, the island of Sulawesi, Kalimantan, with petroleum, gold and diamonds, as well as New Guinea is rich in minerals such as copper, iron ore, and oil still untapped optimally for the prosperity of the nation of Indonesia.
2. as well as the ocean surrounding the islands in Indonesia are still lots of fish that have not been exploited by humans Indonesia, so there are many foreigners who steal fish fishing in the territorial waters of Indonesia.
We are still very lacking in terms of: technology, expertise, motivation, mental less strong, so we need an adequate knowledge, an optimistic attitude, the skills to foster self-reliance, trust in yourself to build community.

b. manpower, lack of: skilled, less skilled jobs, so the results are still small. As a result of education and training must be made better, or request assistance from foreign experts that fit the needs of the country.

c. form of money, tools, machinery, lack of technology to process natural resources.

There are several factors causing the shortage, among others, as follows:
a. Resource constraints. Nature does provide adequate resources abundance. However, still limited, especially when humans process it arbitrarily. Although these resources can be updated or freely available, it still will be reduced and eventually will run out.
b. Geographical differences. Natural resources are usually not spread evenly in each area. There is a very fertile area, there are also mineral-rich areas. However, there are also areas of arid and always short of water. This difference causes the resources become scarce and limited, especially for areas that do not have abundant resources.
c. Population growth. Population growth is always faster than the growth of production of goods and services. It has been observed by an economist, Thomas Robert Malthus. According to him, the man arose following the geometric progression (1, 2, 4, 8, 16, and so on). While the number of production grew only follow arithmetically (1, 2, 3, 4, 5, and so on).
d. Limitation of production capacity. Production capability is supported by the factors of production used. For example the human factors of production capacity is limited because it can still be sick, tired, or bored. Production machines can also be damaged and worn. In addition, the limited production is also determined because of technological developments are not the same. In developed countries, technological developments took place very quickly. Meanwhile, the development needs of developing countries in goods and services is still faster than the development of technology.
e. Natural disasters. Natural disasters are destructive factors that are beyond human power and ability. Although the actual disaster occurred partly caused by human activities alone. Floods, earthquakes, landslides, forest fires, and others has brought substantial losses. Damage to buildings, premises, resources, and even loss of life who are victims of natural disasters.

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Monopoly market will occur in conditions when the market there is only one seller and the goods being sold is no successor, and the number of buyers a lot. Thus, the monopoly market is a market form that consists of only one seller. All bids controlled by a single seller. Monopoly occurs because there are inhibiting factors for other sellers to get into that market. Inhibiting factors consist of technical and legal obstacles. Technical obstacle occurs because the seller is able to produce innovative products, such as finding ways to produce new technology or new production factor. Inhibiting factor in the legal happens if the seller produces or sells its products were given a monopoly by the government. This will lead to the closing of another seller opportunity to produce and sell these products.

The characteristics of monopoly market are as follows:

a. There is one seller or one company. With only one firm, consumers can not buy goods and services elsewhere. Consumers will receive all the policies made by the company. On the other hand, items that are sold do not have good quality because there are no competing companies.

b. Has no close substitute goods. Goods produced by the monopolist can not be replaced by other goods so that consumers do not have much choice.

c. The company as a determinant of prices or price takers. As the only seller in the market, the company can determine the price level.

d. The existence of barriers for companies or other vendors to enter the market. The existence of these barriers profitable monopoly because other sellers can not get into the market, so that corporate profits remain large.

e. No need for advertising. With only one seller, the company does not need to attract buyers with a way to advertise products it sells. Advertising is needed to maintain good relations between seller and buyer.

Monopoly market goodness

1. with the profits earned, the company can conduct research or product development.

2. the efficiency of business because its production is done in large scale.

Monopoly market weakness

1. the absence of equitable distribution of income.

2. probably a price set not in a low level.

3. people do not have much choice in the consumption of goods and services.

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The production process is a process to process inputs to produce goods and services. The amount of output will be affected by large or small inputs and technology used. The relationship between the number of input use and the amount of output produced, with a certain level of technology is called the production function. Input in production activities can be grouped into fixed inputs and variable inputs. Fixed input is a factor of production whose numbers always remain unchanged although the number of outputs has change, such as equipment and machinery. Variable input is a factor of production whose numbers always change when output changes, such as labor and raw materials.

Production function can be used for three-production concept, namely the total product, average product and marginal product. Total product is the amount of overall output. Total product divided by the number of certain variable inputs will produce an average product. Marginal product is the change in total production as a result of changes in the use of one unit of input variables.

With the use of fixed inputs in the same amount, the addition of the input variables that are constantly being made will not always be efficient, this is because the fixed input have limitations. One theory explaining this situation is the theory of David Ricardo, The Law of Diminishing Returns. This theory states that if there are (at least) one input is fixed (such as land or machinery), combined with a variable input (labor) that are each coupled with one unit, the output will increase as well, first with the accretion rate more than proportionately (Increasing returns), but starting at specific point the additional results would be less than proportional (diminishing returns).

Accretion law of diminishing returns reflect a relationship that is very basic. With the increasing number of input variables used while the other inputs fixed, the productivity will decrease. Manufacturers must determine the proper amount of labor to maintain productivity levels.

First we discuss the meaning of the economy.
The word ‘economy’ derived from the word oikonomia, which is Greek. Oikos meaning house, and nomos means rule. Thus, the economy can be interpreted as arranged household.
So, economics is the knowledge that talk about human efforts to achieve prosperity, or well-being.

Prosperity is a condition in which the needs have been met even with the tools to satisfy the needs of limited numbers.

From that many needs of human life it can cause problems or economic issues, such as:
a. The question of human needs. “Unlimited”, because the development of human life itself is influenced by education, science and technology that is simple to create problems in the economy.
b. The question of limited or scarce. It is convenient as a tool to satisfy the needs of essentially unlimited. For example, clothing should be made​​, or find, because not everyone can make clothes, food should be sought and cultivated so that there is food at all times. Limited human capacity, energy, mind, income, limited the amount that can be undertaken. Therefore, every human being should strive to take care of themselves.

Human needs that are constantly increasing the more difficult will lead to tools that satisfy the human need to search for and recovered. Because of the economic resources used to produce devices satisfy the human need to be running out more and apply, the consequences of economic resources scarce is arising.

Interstate commerce has the following benefits:
a. Enhance friendly relations between nations. Countries that conduct trade with each other would have a more intimate relationship.
b. Fulfilled the needs of each country. With the interstate commerce, the lack of production of a country can be met by importing goods from other countries that have surplus production, while countries that have an excess of production can export goods to countries that lack such a production.
c. Exporting countries getting profit. Exporting countries would receive payment from the importing country. Payments can be used to pay for needed imports. Thus, exporting countries will gain benefit.
d. Each country can specialize in production. With the interstate commerce, each country undertakes to maintain maximum production specialization.
e. Encourage the advancement of science and technology. Each country is always trying to improve the progress of science and technology to improve the quality and quantity of goods produced.
f. Encourage the production of goods to the fullest. With the interstate commerce, each country tried to expand the marketing of goods production. When marketing products more widely, then the production will bigger and will save on production costs.

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Principal factors which influence the composition of the industry is technology, organization, production and human satisfaction (technology, organization, production, human satisfaction, each of which is denoted by T, O, P, S). In conjunction, these factors were represented by TxOxPxS = I. However, because the interaction between these factors is uncertain, it can be used Z symbol. Thus the formula is TzOzPzS = I. If the research created, it can be used certain signs to provide features on the factors that are considered as independent variables.

However, to study the influence of these factors and determine which factors are dominant, a more flexible and pluralistic approach is required, which can be called a compatibility approach. Compatibility means that there is harmony among the various factors, institutions, people, objects, and so on. Compatibility may be obtained from experience even though its interpretation is sometimes to be too exclusive. Moreover, compatibility to know the level, alternative, or exemption, as well as with the case of mass production, where technology is considered influence of other factors, a system that transforms it into a symbol that the human subject to another.

What is meant by non-agricultural industry is a business processing abiotic of natural resources by utilizing the technology industry so as to produce various outcomes that have a high value.

Various types of industries that are included in this industry include: cement, iron, steel, motor vehicle assembly, electronics, ships, aircraft, and so forth. To increase non-agricultural industries, the government made ​​great efforts such as:
1. policy to invite foreign investors
2. studies of industrial raw materials, the quality of industrial technology, and other matters related to the industry.
3. training of skilled manpower.

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