Production Costs

S2210 (Microeconomics

On Line Problem Assignment Sheet Chapter 20 Production Costs Gary Hawkins

INTRODUCTION

I have been using the Widget Exercise ' as a teaching aid in my traditional classes for several sessions . Although we will not have the ability to share in the class collaboration of this exercise , I believe it can still be beneficial for on-line students as a teaching aid to better understand production costs

THE EXERCISE

The goal of this exercise is to build widgets and understand how various types of production costs vary as our

classroom Widget Manufacturing Co . produces incrementally additional output of widgets . A widget is a piece of , folded vertically , then folded horizontally and stapled in the upper left hand corner . In class , I begin by placing a stapler and a large stack of on a table . This initial round is referred to on the spreadsheet as Round 0 . I then ask a student to be a timer for the game . Each round of production is limited to 45 seconds . We then begin Round 1 by asking a student to build widgets . At the end of the 45 seconds of production , the widgets are counted and entered in the spreadsheet under the column We continue the exercise by adding additional students for each 45 second production rounds . After each round , we record the or the number of widgets our production company produced . We continue the game until nine production workers (students ) have been added to the...