Hello, welcome to week five of our Microeconomic Principles, and we are actually back at the Black Dog smoke and bar in Champaign Urbana. We met the, the bar last week, on week four. These next two weeks we going to get more into the details of how the business is run, right? This week in particular, we are actually going to talk more about what happens in the kitchen, right? And we'll talk a little about that in a second. And next week we want to talk about more what happens out here at the tables, right? So this, the way I want to kind of pose a question for the next two weeks is, going to be in the following. Think about the way, computing price have changed over the years. In 1998, I actually bought this, this computer. It was a really heavy thing, it weighed a ton, right? I was really proud of it because it was my first laptop computer. But if you think about it, not only was this computer, really heavy, it also didn't have almost no hard-drive, one gigabyte of hard-drive. Right so how much did I pay for this computer, at time I had to say for one time, $2200 for this computer. One gigabyte of memory, really slow. Now fast forward to about, you know, four or five years, particularly let's talk about what happens to the, the price of memory, right? And, and not only computing power but memory itself. After two or three years of having the computer, it kind of run out of space, I have to buy external hard drive. And that external hard drive I wasreally happy, have 3 gigabytes of memory, and it costs about $150, right. It was this bulky heavy thing I had to carry in my backpack, right, all the time. Fast forward to about 6 or 7 years, and we had. You know the new, the new computers we have today, which we essentially carry in our pockets. Right, I have in my pocket kind of a computer. Now how much, this has 8 gigabytes of memory, right, and how small it is. And it only co-, it cost me $200. This is a computer I use right now. I use the, computer that it's lock, what is called Ultrabook, it's actually very thin, right, this computer. It has, you know, how much memory this computer has. It's a lot, you know, 10 times more than the computer I had, in 1998 and I pay a fraction of the price, I only pay $1000 for this computer. And what about those two gigabytes of memory that I had in 1998, in this big computer? How much does it cost and what does it look like? It looks like this. Th is, is two gigabytes of memory, right. It cost about, what, $20. So in 13 years of the quality of the memory Has, price has reduced dramatically. So now a lot more people can afford better quality, memory and computing power than before. That is actually one of the reasons you are actually watching me on your computer today. And you cannot have done this, some years ago, let's say in 1998. When I actaully bought my first computer. The reason why that is has to do with the things we're going to talk about this week and next week about how a business is operated and also how a business operate in the market structure. At the end you will see that the process that really creates this innovation and benefits everyone is no different then the survival of the fittest idea. That Adam, that Charles Darwin actually talks so much in biology We learn more about it next week. A lot of these ideas were actually already established in economics and this is kind of the idea of driving the economic system as well. But, this week, we start in the kitchen. We want to know things like the process of production takes place in this kitchen of this how is barbeque, how are barbeque sandwiches produced? What type of units, inputs are used? Electricity, kitchen space, workers. How are these inputs combined? How you use your worker with the space you have. You have limitations of, space, what happens then. What happens to the productivity of your workers when you have too many workers in the limited space? And what happens to the cost of productions, particularly? This is a question that we do first, and it's real important one, what happens to the productivity of your workers when you actually start running out of space, particularly the cost? We going to start with those questions in production first, the kitchen first. Then next week, we move into the tables. And remember that question that we're going to try to answer at the end of the next week. So we're going to take two weeks to actually answer this question. How is society improved by reducing the price and improving the quality of, of production through this process of survival of the fittest in business?
