1 / 12

Production

Production. Chapter 5.3 . Warm-Up. “Two’s company, but three’s a crowd.” What does this saying mean? How have you seen it apply to your own life?. Think About it…. Based on Tuesday’s activity (paper airplanes), consider the following questions: What strategy made your team most efficient?

ordell
Download Presentation

Production

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Production Chapter 5.3

  2. Warm-Up “Two’s company, but three’s a crowd.” What does this saying mean? How have you seen it apply to your own life?

  3. Think About it… Based on Tuesday’s activity (paper airplanes), consider the following questions: • What strategy made your team most efficient? • What were some problems you faced? • How was productivity affected by additional workers?

  4. Production The process through which a company converts productive resources (input) into goods and services (output).

  5. Short Run vs. Long Run Short Run Long Run No resources are fixed • At least one resource is fixed The long run and the short run do not refer to a specific period of timesuch as 3 months or 5 years. The difference between the short run and the long run is the flexibility decision makers have to change the quantity of resources being used.

  6. Resources Fixed (remains constant) Variable (flexible) i.e. Factories, machinery, etc. i.e. LABOR

  7. Product • Total Product: Total output of the firm • Marginal product: Amount the total product changes with each additional unit of resource (labor)

  8. Increasing Returns The greater the resources, the greater output gained for each additional resource.

  9. Law of Diminishing Returns As more units labor are added to other resources, marginal product eventually declines. Marginal product declines not because the new workers are inferior, but because of the lack of available space, equipment, etc.

  10. Law of Diminishing Returns

  11. Marginal Product Curve

  12. Pair-Share Based on Tuesday’s activity (paper airplanes), answer the following questions: • What were your variable resources? Fixed resources? • Why would the additional number of paper airplanes created eventually start to decline? • What would you need in order for companies to increase productivity as they increased their size?

More Related