Wednesday, November 14, 2012

Topic 14: Productivity Experiment

Please write about the in-class experiment you performed by producing widgets (those paper rings). In it please describe the experiment and your role in it. Write about what went well and where problems came up, keeping in mind concepts like the law of diminishing returns (both for labor and capitol), capital accumulation (especially in terms of human capital), and division of labor and specialization. Did things go the way you would have expected in terms of these concepts? If not, why do you think that was so? What were the surprises, if any? What do you think the "company" could do in the short-run to improve productivity? What about the long-run? How close do you think this experiment came to approximating a real-life situation?

  • The experiment was to test how the number of laborers and capital varies and influences that amount of product produces, and what the costs were. These are determined and described with marginal product and marginal cost. My role in this experiment was the last laborer to be added, the twelfth laborer. There were many problems in this experiment. It went well when there was only one worker. However, when more and more workers were added, the cooperation between these workers was very ineffective and inefficient. Our curve was very strange. The marginal product was increasing and then decreasing in the first few work days, but later on it gradually increased, even if it is slightly. However, diminishing returns was still illustrated. Once again, the experiment didn't go as we had expected in terms of concepts such as the law of diminishing returns, capital accumulation, and division of labor and specialization. The reason was mainly because of "technical issues", or capital problems, and because there wasn't an effective and efficient system of division of labor and specialization. The surprise was that the quality of the products was very bad because of the insufficient time in the work day. To improve productivity in the short-run, the firm should allocate one day to dividing and specializing labor. To improve productivity in the long-run, the firm should increase capital such as scissors and staplers, since there was too much labor capital and the technological capital could not be distributed evenly. This experiment, I believe, is quite far from approaching a real-life situation.

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