These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Lecture!6!Outline(of(Last(Lecture((I. Personal!Income!II. Personal!Income!Taxes!a. Disposable!Income!Outline(of(Current(Lecture((I. Tea!Bag!Demonstration![Terms]!a. Production!Process!b. Labor!c. Capital!d. Output!e. Division!of!Labor!f. Diminishing!Marginal!Return!!II. Organization!of!the!Production!Process!!III. Surplus!Current(Lecture!1) Tea!Bag!Demonstration:!In!an!effort!to!help!students!fully!understand!the!Production!Process!and/or!assembly!line,!the!Professor!called!on!volunteers!to!complete!the!production!of!tea!bags!–!the!output.!Throughout!the!demonstration,!he!stated!and!applied!these!terms:(a. Production!Process!(Line):!The!process!of!converting!inputs!into!outputs.(b. Labor:!The!primary!factor!of!production.(c. Capital:!The!factories,!machinery!and!equipment!owned!by!a!business!and!used!in!production.(d. Output:!The!amount!of!energy,!work,!goods,!or!services!produced!by!a!machine,!factory,!company,!or!an!individual!in!a!period.(e. Division!of!Labor:!A!production!process!in!which!a!worker!or!group!of!workers!is!assigned!a!specialized!task!in!order!to!increase!efficiency.(f. Diminishing!Marginal!Return:!The!decrease!in!the!marginal!output!of!a!production!process!as!the!amount!of!a!single!factor!of!production!is!increased,!while!the!amounts!of!all!other!factors!of!production!stay!constant.(2) Organization!of!the!Production!Process(a. M!–!C!–!C’(Prime)!–!M’!(Prime)(b. M’!> M(c. M’!=!M!+!Surplus(!!((((((Econ(104(((((11th(Edition(! !d. Main!Components!of!M’:!(i. Surplus(ii. Reinvestment!(Necessary!Prime)(iii. Wages!(Necessary!Prime)(3) Surplus:!An!excess!of!production!or!supply!over!demand.(4) Surplus!Questions:(a. Where!does!it!go?(b. Who!decides!where!it!goes?(c. Who!owns!it?(d. Who!controls!the!surplus?(e.
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