Week2 Regflection

Learning Team Reflection - Production and Cost Analysis

This week was definitely difficult for me, especially in dealing with the production and cost analysis. If anything this week has taught me that the way an accountant and economist determine profit is completely different. Economists take into consideration the implicit costs, whereas accountants do not. Implicit costs require an estimation of cost and that can cause a margin of error leading to misstating profits, which under the Generally Accepted Accounting Principles is not allowed. I am still unsure of how to apply these principles to the current industry that I am working in. I have never considered the economic stand point of any topic. Hopefully as this class continues, I will better understand the topics and how to apply them.

This week was a major learning explosion for me! One of the most valuable lessons that I will take with me is the law of diminishing returns. I have heard the phrase before from a philosophical perspective; however, I never knew there was a scientific explanation which supported the theory. I also enjoyed learning about the "sweet spot". Now, I don't recall the text referring to the point between diminishing returns being realized and the potential for less production increasing as the "sweet spot". However, I believe sweet spot accurately describes the delicate balancing act that must occur for a firm to remain at its peak performance. While the previous two ideas were fun for me, I did struggle with keeping track of the various curves. I tend to do well with understanding the theory and get a little mixed up with the graphs.

This week we learned about productivity and cost. It was easy for me to understand the concepts when put into real world scenarios. Seeing how there are initial costs and then a peak or optimal time where the production is optimal at the cheapest costs, however demand isn't necessarily right at that point. So there are many factors to consider when...