You are to write your next blogpost based upon the information and the material we will discuss in class on the Factors of Production. Due Next Tuesday, 18 September.
You
and your friend Billy Bob have been doing a good business at your Thai sausage stand
you have been operating on weekends in a market stall at the local parking lot
at Big C. Sales are brisk! You have
decided that, rather than just blowing your profits on a new iPhone for Mr. Matt, to invest
in a way to expand your business and -- you hope -- bring in even more profit.
You have been selling 200 sausages each weekend at B100 each. Supplies cost you
B10,000 and rent for your space in the parking lost is B5000. You and a friend each spent five hours
working at the stand. That means you have B5000 left to divide between your
wages, and money to invest in expanding your business. The more wages you
pay yourself and your buddy Billy Bob, the less you will have to invest.
Now that you
know about these three factors [of production]--Land, Labor, and Capital--that you need in
order to produce wealth, perhaps this knowledge can help you approach this
business decision. We will forget about one of the factors (Enterprise) since we assume you are an entrepreneur
and assume control of the business with your friend.
How might you
go about investing your sausage profits?
Identify how you would specifically or generally make investments in
additional Land, Labor and Capital -- and if you want to, try to estimate, as best you can, how
many additional sausages each option would allow you to sell, and how much profit your investments would bring in. You may be as creative in your approach as you want but take the assignment seriously. This is not expected to be a business plan.
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