Entry 14: Company Experiment Reflection

After the company experiment  where we made a firm that is specialized in making a product called widget, we graphed the total production in accordance to an increase of one more labor per day. It is worthy to note that the graph did not represent what normally happens in a market but broadly resembles it. When we see the graph, we see an inconsistent graph that spikes up and plunges downward. That might be result from the different standard in quality control. At first, when we think that making the widgets isn't a big deal and is relatively easy, we gave more trouble to the only labor, Brandon, and had stricken down many of the products. However, as we gradually find time being very precious and that these widgets are actually a lot more difficult to make than we have expected, the quality control became much less strict. However, if we disregard the random spikes and drops that probably came from a result in the change of standard, we see a general increase and then a less steep increase. Eventually, towards the end, with twelve labors, the increase in production was minimal. The reason behind this is that at the given quantity of capitol, two desks, two staplers, and two scissors, there's really only so much that people can do and by hiring a lot of people, the additional labors starts to get less and less work to do. When we measure the cost, the cost rises after the marginal product starts to decrease because once additional labors stop generating the same amount of work, the relative cost per labor rises. It is worth less when a labor can make two widget than a worker that sits around doing nothing but costs the same wage. From this experiment I learned first hand the burden of more and more labor because during the experiment, I keep on telling people to stop crowding around me reaching for the stapler because stapling does not require so many people while there's only one stapler. Work space also becomes scarce as we tell the accountant and manager to make some space for the additional workers.

Entry 13: The Return Of Zeppelin

The basic factors that decides demand and supply can be memorized with two mnemonics; TRIBES (Supply)and ROTTEN (Demand). Demand for the Zeppelin dropped to an all time low after the explosion of the Hindenburg. The reason it dropped is because the cost of riding on the Zeppelin was too high (considering death), and the benefit too low (slow transportation). Now the time has changed and Zeppelin is again in the market now. The value of Zeppelin increased because as people's income become higher and disposable income increases, people have money to spend on these leisure transportation. Another major reason is the advancement of technology. Because the brand new Zeppelins have improved quiet interior, it became a pleasure to ride in, and also the use of helium instead of hydrogen that is a lot safer. Safety was the major kill shot for the Zeppelin caused by the Hindenburg and because of the improve in technology, people are more willing to venture on these Zeppelins. The owner owns the only one in North America and one out of three in the entire world. This far distant in substitute (there's no other air travel that's as safe, as enclosed, as special, and as leisurely) as the Zeppelin so far. The modern technology was able to bring back the less safe glory of the past and this attracted many people. This market is an oligopoly and close to a monopoly because there are only 3 in the world that makes it an oligopoly. It is very similar to a monopoly because he actually has the only one in North America and there are no other same service available in North America.