Topic 14 : Productivity Experiment

In the experiment that we did in class was to demonstrate the law of diminish return. We tried to produce widgets (those paper rings). At first, there was only one labor. As the labor gradually increases, the products increase. However, the more the labor gets, the products start to decrease due the law of diminish return. This happens because the labor might not have enough equipment and the spaces are limited. Therefore people have to share the equipment and squeeze in the same limited space, which reduces the efficiency.

There were many problems when producing widgets. I think the main cause was that the manager didn’t carefully plan how the factory should run. Therefore in the beginning, people weren’t cooperating but just did there own products. Because of improper management, the number of products was quite messed up. I believe that for the company to improve productivity in the short-run, it’s number of labor should be well controlled, not too many and not to few. As for long run, there should be more capital, increasing the equipment and space. It seems that this experiment actually did symbolize the real life situation, because sometimes we produced really bad products due to the inconsistent skills.