Authors libby rittenberg 411
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Chapter 8
Production and Cost
Start Up: Street Cleaning Around the
World
It is dawn in Shanghai, China. Already thousands of Chinese are out
cleaning the city’s streets. They are using brooms.
On the other side of the world, night falls in Washington, D.C., where the
streets are also being cleaned—by a handful of giant street-sweeping
machines driven by a handful of workers.
The difference in method is not the result of a greater knowledge of
modern technology in the United States—the Chinese know perfectly well
how to build street-sweeping machines. It is a production decision based
on costs in the two countries. In China, where wages are relatively low, an
army of workers armed with brooms is the least expensive way to produce
clean streets. In Washington, where labor costs are high, it makes sense to
use more machinery and less labor.
All types of production efforts require choices in the use of factors of
production. In this chapter we examine such choices. Should a good or
service be produced using relatively more labor and less capital? Or should
relatively more capital and less labor be used? What about the use of
natural resources?
Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org
411
