Journal Topic 14 - Productivity Experiment

Journal Topic 14 - Productivity Experiment
The experiment that we did in class on Friday was pertaining to the laws of diminishing returns. We basically ran a pseudo-company which was supposed to imitate the decision making of the firm. We started with 1 worker and recorded how many widgets he could make in a minute. The next time we had 2 workers and recorded how many widgets that they could make in a minute. We kept doing this until all the students except for the quality control person and the manager were workers. The capital remained the same throughout the process. There were a few not idealistic discrepancies in the data. For example, on one work time compared to the next, the output decreased despite the increase in labor, even though after that session of work, the output would increase. The major trend was that as labor increased with capital remaining the same, the marginal average product would increase until a certain point, and then the marginal average product would start to decrease. This experiment thus showed the law of diminishing returns. In the short run, the company could have reallocated its labor force, putting more people into rolling the paper and stapling it. In the long run, we could have bought more capital, which would include another table, more scissors and more staplers.

Journal Topic 13: The Return of the Zeppelin

Journal Topic 13: The Return of the Zeppelin
The determinants of demand will be mainly based on income, as well as substitutes, which would be ocean liners and cruise ships. The determinants of supply will be based on the price of the travel. Technology has allowed the Zeppelin to come back, the new technology has made the Zeppelin safe to travel in and allowing this vehicle to be eligible for luxury transportation. Perfect competition occurs when many firms are producing an identical product where no firm entering or leaving the market will change the price of the product. Monopolistic competition occurs when firms produce a similar product but have the only one of their kind. Oligopoly is when a few firms control the market. And a monopoly is when one firm controls the market, or a significant portion of it. The Zeppelin represents a monopolistic competition, its the only kind of air travel of luxury of its kind, but it can be substituted for an ocean liner or cruise. Three determinants of demand are price of ocean liners, consumer preference, and income. I don't think that air travel as a luxury similar to sight seeing will be popular, in the air there isn't much to see, also the design of the airship will have to be light, so not many activities will be able to be hosted on board. This vehicle will be purely made in terms of the consumers' standpoint for viewing the air. I would probably never try it just because it doesn't seem fun or appealing to me at all. I might go up on it for a scientific purpose.