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57 views3 pages

Stuff For Weebly24

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api-247118973
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© © All Rights Reserved
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5.2.

2b Production Data Analysis



Procedure:
1. Open Microsoft Excel
2. Using your worksheet from our origami paper cup activity set up a table so that we can calculate the
marginal Product and Cost per unit. Your table should resemble the layout of the rows and columns on
your worksheet.
3. Put in a function to calculate your marginal product and use that function to auto calculate that column.
4. Put in a function to calculate your cost per unit of marginal product and use that function to auto
calculate that column.
5. Create ONE line graph to show the relationship between the number of workers and the following:
a. Total Production
b. Marginal Product
c. Cost Per Unit of Marginal Product
Important Information:
1. Marginal Product is the change in output that occurs when a unit of labor is added (employee is hired)
2. Marginal Product can be calculated by subtracting the labor output from round 0 from round one, the
output from round 1 from round 2, and so on. As an example say the production occurred as follows in the
four rounds: 5, 12, 17, and 20. Note that if there is no labor there is no output. Then the first worker helped
add 5 units of output (5 minus 0). The second worker added 7 units of output (12 minus 5), the third worker
added 5 units and the fourth worker added 3 units. Diminishing returns set in with the third worker in this
example because the marginal product declined from 7 to 5 with the addition of the third worker. Note the
reason for this is that with only one pair of scissors only so much can be cut, so additional workers are
probably waiting on patterns to be cut. Thus, additional workers cant add as much output as previous
workers.
3. Cost Per Unit of Marginal Product takes what each employee (unit of labor) would be payed and compares
it to how much output was produced to find out how much it costs to produce one unit of output. For
example, say each worker gets paid $7 during the period of production. Since the first worker added 5 units
of output, those units cost the company an additional (in addition to the cost of the scissors and the paper)
$1.40 per unit of output ($7 divided by 5). The second worker added 7 units of output, or added output at $1
per unit of output ($7 divided by 7). The third worker added output at $1.40 per unit of output and the fourth
worker added output at a cost of $2.33 per unit of output added.

Conclusion Questions (Please complete these questions and the letter in Microsoft Word):
1. What factors of production were used to produce the cups?
How much was made during the time of 5 minutes and the process if cutting and folding.


2. With the addition of what worker(s) did diminishing returns occur?
With more people added to the group the number cups increase but in other groups it decrease because
people just seem not to work together.


3. What happens to the cost per unit as diminishing returns set in?
Prices either increase or decrease because the wage is $7 an hour and you also have to use money to buy the
supplies for the cups.


4. Why is it important for an entrepreneur to understand the concept of diminishing returns?
Its important because the entrepreneur must know how to sell and how much money it would take to
make them and how to pay the workers and find a way to increase the production of cups.


5. The scissors that were used to cut out the cup origami pattern would be an example of

A. labor
B. land
C. capital
D. entrepreneurship


6. If 1 worker produces a total of 4 units of output, 2 workers produce a total of 10 units of output, 3 workers
produce a total of 18 units of output, 4 workers produce a total of 25 units of output, 5 workers produce a
total of 30 units of output, and 6 workers produce a total of 28 units of output, with the addition of what
worker do diminishing returns first occur?

A. worker 6
B. worker 3
C. worker 4
D. worker 5


7. Briefly explain what the entrepreneur could do to improve the productivity of the additional workers hired.
Use complete sentences for your answer.
The entrepreneur can learn what makes people want to work and what ways they learn increase their
productivity. They can also look in what environment they work and see if that has affect on workers and
maybe see if the wages are right for the workers.









8. Write a letter to the owner of the cup factory explaining the concept of diminishing returns and then offer
suggestions on how to improve the productivity of the additional workers hired. Students should apply the
principles of six-trait writing to their letters.
Dear Mr. Smith
Im writing to you to show you how you can improve the productivity of the workers and also the diminishing
of returns. As I did research I have found more ways and ideas in how to make the company better and improve
your money. Im going to list some ideas and improvements like for example:
Play music
Give them energy bar or/and drinks
Have better working envoirment
Maybe rise the amount of product and wages
If you have any of your ideas that would be great as well were just trying to make the sells better and make
the worker make more of the products.
Your Boss,
Jesus Escobar

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