Episode 3: Production Junction - What's Your Function?

Episode 3 - Production Junction - What’s Your Function? Warning! The MBA Hole podcast is not intended for children. The explicit tag is there for a reason. It is only intended for adults that are masochistic enough to consider taking on an MBA program. If you like the show, please give us a five star rating and review on apple podcasts. This helps us fool our robot business overlords that we are, in fact, more important than we actually are. Follow us on the Twitter box @mbaholepodcast. Sunk Cost Production Have to figure out what to produce because of scarcity Production Possibilities Frontier (PPF) Creates graphical representation to show specialization Law of Increasing Opportunity Cost As you specialize in one product, the opportunity cost to produce it is going to increase Opportunity cost - basically what are you giving up? Cost associated with opportunities forgone when your resources are not put to their best alternative use - the empty building, or even owning and operating a building. Marginal Product of Labor - MPL=change in output/change in labor input - the goal is to find the highest MPL Point of Diminishing Marginal Returns Production Function: Q=F(K,L) where Q is output, K is capital, L is labor Specialization Technological Advances The more units produced, the less the production cost Productivity assumes... People act rationally People reactive to incentives Principal-Agent Problem Disclaimer: The opinions and views expressed in this show are that of the host only. They do not represent their children, wives, dogs, employers, co-workers, neighbors, inlaws, friends, acquaintances, or esteemed university faculty.