Capital Chips (Part 2)

Through the use of a historical timeline of the capital investments made by the company the resulting benefits will be examined. The benefits from the capital investments of Herr Foods, Inc. will be related to their effect on the standard of living. Then students will visit one of three websites, select an innovation/invention of their choice to analyze in terms of its impact on productivity and the standard of living. Finally, the teacher will select one invention/innovation from a designated website and have students analyze it in the same economic terms as the focus of this lesson and write an essay summarizing the innovation/invention.

Productivity is a measurement of output resulting from the use of productive resources or inputs. It refers to the amount of output per unit of input over a period of time. An increase in productivity may mean producing the same amount with fewer inputs, producing more output with the same inputs, or a combination of the two. Companies look for ways to maintain and increase the level of productivity in order to remain competitive while maintaining profits. One way of accomplishing this is through investing in capital goods such as machines, tools, and new ideas used in the production process. Technological improvements in capital goods are a leading cause of increase in productivity.

After completing the following activities, your students will develop a better understanding of the economics associated with productivity. In the first activity your students will explore the concepts that are connected to productivity. In the second activity your students will investigate the Herr’s Potato Chips, a company that is constantly working at incorporating new techniques to satisfy the customer. Finally, in the third activity your students will use the Internet to search for inventors and inventions. Their task is to find an invention they would like to learn more about and learn how that invention improves its environment. After your students complete all three parts to this lesson they will find a series of questions that will explore what they have learned from Capital Chips about productivity.

Part 2 Introduction:

The students are going to take a tour of the Herr’s Foods Inc in this lesson. Herr’s Potato Chips have been on the market for the past 50 years. The company is constantly working at incorporating new techniques to satisfy the customer. The students’ job will be to see how these new techniques improve the company and benefits the customer.

• Analyze the effect of captial investment on the standard of living.
• Analyze the effect of innovation and inventions on productivity.

• Herr’s Food Store: Provides a History of Herr’s Foods.
  www.herrs.com/AboutHerrs/History.html .

• Interactive Activity: A timeline of events concerning the Herr’s Potato Chip Company.
  Timeline

1. Point out to the students that they will learn about some actual investments in capital resources that have increased productivity for one company in particular. They will learn how Herr’s Foods, Inc. increased its productivity over the years through a variety of investments in capital resources.
2. Divide the students into 10 groups. Assign each group a year (or point on the Herr’s Foods timeline).
3. Direct all groups to click on the first entry of the timeline and read it so that each group understands the beginnings of the Herr’s Potato Chip factory business.
4. Direct the students to click on the point on the Herr’s timeline that corresponds to the date(s) that they were assigned.
5. Tell the students to answer the following questions using the information they obtain from the timeline for the year assigned.
   • What was the capital investment, new idea, or innovation that occurred during this time frame on the Herr’s timeline?
   • How did this change increase the productivity of the Herr’s potato chip business?
   • What was the impact of this change on the consumer, producer, and worker?
6. Direct all groups to click on the last entry of the Herr’s Foods timeline and explore it so that each group has an understanding of the progress Herr’s Foods, Inc. has made.
7. At the end of this part of the lesson involving Herr’s Foods lesson (or at the end of the entire lesson), plan to have a variety of Herr’s products for the students to enjoy.

The students have now applied the concepts from the previous activity to a real-life business. Next the students will get a closer look at an innovation or invention, to see how they can be used in a business.