Production of goods and services is one of the core and fundamental aspects that relates to companies and organization. Organizations aim at making profit and this would only be achieved through proper production of goods and services. It is the wish of every organization to produce as much as possible in order to meet the demand that exist in the market but several factors act as obstacles to wards this. One of the major things that deter effective production is the scarcity of resources for production such as raw materials that are essential for the production process. When we put into our imagination that there is a device that can help improve productivity in any enterprise as much as one thousand times, the problem of scarcity among goods produced is solved automatically even with scarce resources.
Macroeconomics and microeconomics
Having such a device would solve both the microeconomic and macroeconomic aspects in relations to the product. The microeconomic aspects include the decisions of the organization i.e. those that the organization faces and these are mainly in relations to raw materials and technology for production among others. On the other hand, the device would also have solved the macroeconomic problems faced by the whole country which is having enough products in the market to satisfy consumer demand.
Economic theory and economic policy
The device would result in the formulation of economic policies that would ensure there is equilibrium in the market due to the surplus that may be experienced in such a scenario or increased demand. The policies would be based on economic theory which makes the base for the formulation of such policies. Economic theory is seen to be an important aspect in the formulation of economic policies that would ensure equilibrium in the market.
Factors of production
Factors of production refer to the amount of inputs used in producing goods as well as services with the aim of making economic profits. Some of these factors of production will include labor, land, entrepreneurship and capital. The introduction of this devise in the enterprise will have some effects on these factors of production. The most affected factor of production will be labor. The fact that this devise can improve productivity and can be operated by any individual will imply that there will be no need for a huge labor force. Therefore, its introduction will result into retrenchment of other employees since there will be no need for them. This devise considered as an additional capital to the enterprise. It is a very important piece of devise because with its productivity, there will be no need for additional capital in terms of machinery.
Production possibility model
This is a model that depicts the maximum amount of output given a several inputs. On most occasions, this model assumes that all the inputs are utilized efficiently. When we look at our situation, the inputs that will affect this model include labor and capital. Production possibility model will shift to the right as a result of the introduction of the device. Since it results into increased productivity, the curve will shift to the right as a reflection of the increase in productivity.
Opportunity cost
What will be the opportunity cost of introducing the device into the enterprise? It will be important to look into the foregone good or service. In this situation, the foregone service will be labor. The introduction will result to a reduction in the number of employees. However, the reduction in labor will not affect the productivity of the enterprise.
