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CAPACITY UTILIZATION RATE: The ratio of actual production by business sector factories and other productive establishments in the economy to the potential production of these establishments. This rate indicates if our economy's factories are being used as effectively and as fully as possible. Like the unemployment rate, the capacity utilization rate measures how close our economy is to full employment. And like unemployment, this rate moves up and down over the course of a business cycle. During expansions, the rate is near 85 percent (considered full employment), and during contractions, it tends to be in the 70 percent range. In addition to an overall rate, there are also separate rates for manufacturing, mining, and utility industries.

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by Orley M. Amos, Jr.
Professor of Economics
Oklahoma State University
Go to: Chapter 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Chapter Three: Some Yummy Purple Fruit

Tyler plopped his posterior next to the two sacks of precious gems. Recent events called for a little thought. With these two, newly acquired bags of jewels, his return home would be met with unmatched prosperity. He was euphoric. Tyler did wonder momentarily why that cantankerous old Professor Francis would do this for him. Of all people, why would Tyler be blessed with such good fortune. The wonderment soon passed as he envisioned the fruits of his wealth.

Anything and everything that Tyler wanted could be, would be, his. Expensive cars, luxury boats, enormous mansions, extended vacations, fine dining, fashionable clothes, would all come to symbolize the guy they call Tyler Martin. He would have it all. Well, maybe not everything, but a lot. The more Tyler thought and dreamed and even fantasized about spending his newfound wealth, the more he realized how easy it would be to exhaust a few million--even a few billion--dollars.

The more he thought the more he realized the truth of what he had told that long-eared, monkey-like creature--no one could be completely satisfied. Even a fortunate senior with two large purple bags of wealth would go wanting.

Tyler's thoughts were suddenly crashed by the booming, easily recognizable voice of Professor Francis.

"Tyler, the voice said, again seeming to be everywhere, yet coming from nowhere. "You have come far in a short time. You have identified the most important principle of economics."

Tyler jumped to his feet, still somewhat concerned about the meat on his appendages. "What do you mean?" he shouted toward the canopies of the tallest trees.

"You need not shout, Tyler. I hear you clearly." After a short pause, the professor's voice continued, "What did you learn from the first test?"

Tyler thought for a moment, trying to recall his conversation with the pointed-eared instructor.

"He asked me what I would want to be completely satisfied. But I couldn't think of anything. So I told him so. Then he asked me about scarce resources. You know, capital, land, and, uh..." Tyler paused for a moment once again forgetting the third factor, "...and labor."

"And what else did you learn?" the professor asked.

"Well that little guy stumped me on questions about scarcity and opportunity cost. But he gave me these two bags of jewels," Tyler said motioning to the purple bags next to him. "What's going on here professor? Why did he give me the jewels when I answered the scarcity question wrong? I don't understand."

"Do you know what scarcity is, Tyler?" the professor asked.

"I... uh... I don't know. I can't remember," Tyler responded meekly.

"Remember when we discussed scarcity in class, Tyler?"

"Yes... well... sort of..." Tyler mumbled. "But I guess I forgot"

"Do you remember the definition of opportunity cost, Tyler?" the professor asked.

"I... uhm... don't know that either," Tyler said, becoming more than a little bit ashamed.

The professor's voice began to fade as he said, "You will remember scarcity. You will learn opportunity cost. Continue your journey on the path."

"Wait professor," Tyler said, "When can I leave? I want to leave."

He waited for a response, but none came.

At that moment Tyler was divided between euphoria, from his two bags of jewels, and apprehension, from the clearly dangerous surroundings of this land. He slowly untied a purple strap that secured the first of the two bags, still not convinced that these bags contained precious jewels. He looked inside, half expecting it to be filled with moldy mushrooms or poisonous snakes.

The sight was more than breathtaking. Tyler took an uncontrollable gasp of air. The bag was indeed filled with gems and jewels of every shape, size, and color imaginable. Tyler, his hands visibly shaking, plucked a large purple gem lying on top. It had been cut into a rectangular shape, and was about the size of an ice cube. Tyler weighed the gem in his trembling hand.

"Wow," he mumbled to himself. Even in the dim green twilight the purple jewel sparkled. He raised the jewel to catch a narrowed strip of light slipping through a tiny crack in the umbrella canopy overhead. It sparkled even more. Feigning uncharacteristic flamboyance, Tyler pretended to polish the jewel on his orange dust-covered shirt, even though the action was fruitless. He then placed it on an outstretched finger and pretended it was the setting of a priceless ring.

Tyler's wandering thoughts of grandeur were cut short when he heard a noise in the foliage behind him. He jumped and turned abruptly, instinctively sticking the purple gem in his pocket for protection. He still had every reason to expect a bloodthirsty, student-crunching monster. But not this time. Perhaps it was just a breeze. Or maybe it was that strange looking flying frog-cat with feathers sticking from its head. Just in case, he closed the bag securely with the strap. It was best to be moving on. The sooner he was through with this silly economics lesson, the sooner he could return home with his gems.

Tyler, picked up the first bag, then reached down for the second, dropping the first on his foot in the process. With the second bag clutched tightly in his arms he then tried to pick up the first. All he managed was another sore foot. These bags were bigger, heavier, and more cumbersome that he had realized. As much as he tried, Tyler was unable to hold both bags at the same time. After several more unsuccessful tries Tyler sat down on the red carpet-grass, completely frustrated, to ponder this unexpected turn of events.

Here he sat with two bags of jewels. They were his--all his. He only had to pick them up and carry them down the path. They were his for the taking, but he was unable to take them. He considered every conceivable way to carry the two bags at the same time. But none worked. The bags were simply too heavy and too awkward. He wondered how he had gotten into this ironic situation. Why would the instructor give him two bags of jewels when it was obvious that Tyler could carry only one?

Suddenly, Tyler realized the answer, laughing aloud as he did.

The instructor knew Tyler was unable to carry both bags. The fuzzy, green-clad vermin knew Tyler had a scarce resource. Tyler's ability to carry these bags of jewels was a scarce resource, a scarce labor resource to be exact. Two bags were Tyler's 'just for the taking' but Tyler could carry one--only one.

He laughed even louder. The instructor was a clever fellow. Now Tyler understood the concept of scarcity. Tyler's resources were limited relative to the demand for those resources. There was only so much that Tyler could carry. In grim satisfaction of this realization Tyler kicked one of the bags.

"You are correct," the professor's voice boomed again.

Tyler was startled as he clutched his sore foot. The last thing he expected at the moment was the professor's voice.

"I am?" Tyler asked. Then he said, more confidently, "Yes I am."

"Now, I will ask you again. What is scarcity?"

"Scarcity exists when a resource is limited," Tyler said proudly.

"Not only is the resource limited," the professor noted.

Tyler then continued, "Yes, the resource is limited relative to the demand for the resource. I want to carry two bags, but can carry only one." Tyler then asked, confident he had learned a valuable lesson, "Can I leave now?"

"Your lesson has only started, Tyler" the professor said, his voice beginning to fade. "You have much more to learn."

Tyler began to yell to the professor, but stopped when he sensed it would be futile. He knew his only alternative was to continue on the path until the professor decided the lesson was over. He looked down at the two bags of gems, his problem still unsolved. How could he carry both bags? Quite simply, he could not.

His thoughts were interrupted again by the flutter of wings a short distance away. The strange looking flying frog-bird-cat had assumed a perch on one of the glowing stick plants. It flapped its wings nonchalantly. The green stick plant wavered slightly, causing shadows to dance on the foliage behind it.

Then, as Tyler watched the composite creature bounce up and down on the green stick, he remembered the professor talking about scarcity and economic growth. He recalled that the severity of scarcity can be lessened through economic growth caused by increases in the quantities of the scarce resources. If only Tyler had more labor. Or perhaps some land or capital. More land would be of little help, but capital... Yes, of course. If Tyler only had a little capital to augment his scarce labor resource.

As if on cue, the duck-billed frog-cat fluttered its wings again drawing Tyler's attention. Tyler watched the green stick plant waver. The amphibian cat-bird fluttered again and the stick pant continued to waver. Finally the message got through to Tyler. Of course--the glowing, green, stick plant. He bounded toward the frog-cat, which immediately jumped into flight. He checked several of the green stick plants for strength and thickness. The one just used as a perch by the flying creature seemed to be the best. With some effort Tyler managed to break it into the right length for his purpose. He tied one bag onto each end of the stick and hoisted it across his shoulders. In spite of the eerie glow, his newly fashioned tool, his capital, had indeed increased his carrying capacity. Tyler's financial burden was heavy, but worth the discomfort.

With both bags secured, Tyler resumed his trek down the path. As he walked he thought, 'Scarce resources and unlimited wants certainly create a lot of problems. I guess the professor is right, people can't have everything that they want. When you have a lot of people, each wanting something, but with only so much to go around, everyone can't have everything.' He thought about a big platter of chicken sitting on his dining room table. 'There aren't enough drumsticks in the world for everybody.'

Tyler had no idea how far, or how long, he walked. The bends in the path disoriented his direction and distance. But hours surely passed. The blue sun could not be seen through any cracks in the umbrella tree canopy overhead, and glimpses of pink sky, that could be seen, were much darker. The eerie twilight under the canopy became darker and more foreboding. By Tyler's best calculations nighttime was approaching this land. What had that long-eared instructor called it, 'Leornia?'

He tried to determine how long he had been in this strange land of Leornia. Had it been half a day? At least. He went to see the professor at midday. And he had now been in Leornia at least seven or eight hours. Exhaustion was rapidly overcoming him. He knew he would have to stop and rest for the night--an unappealing thought at best. He also needed food. What had that instructor said about fruit--something about purple fruit?

Any color of fruit would have satisfied Tyler at the moment. He walked slowly, the financial burden weighing more heavily on his shoulders. Rounding another of the ever present curves, Tyler stumbled over something. He maintained his balance, but both bags of jewels crashed to the ground.

"Ow," Tyler screamed weakly, reflecting surprise more than pain.

He reached down to collect his bags. However, the bags were surrounded by several small, round, purple orbs, each about the size of an orange. Tyler immediately realized that this must be the purple fruit the instructor had mentioned. Tyler adjusted his glasses and picked up a piece of the fruit. It was firm. He hesitated, then took a bite. The taste was pure ecstacy for his hunger. He quickly ate a second and a third. Delicious--with a taste that was a cross between a sweet grape and an apple. A fourth and fifth soon followed. On the sixth fruit, Tyler slowed noticeably, his stomach nearly full. Then remembering the instructor's warning that this was the only food along the path, he ate a seventh, just in case.

With his stomach filled to capacity, Tyler sat down on the red carpet-grass, leaning against the yellow trunk of an umbrella tree in the middle of the purple fruit pile. The thickening twilight heightened Tyler's fears of unknown horrors. There was no telling what hideous creatures roamed the place at night. He drew the two bags of gems closer. His anxieties over flesh-eating beasts could not ward off his sleep-induced exhaustion. Soon he gave in. The waiting monsters need wait no longer. He removed his glasses, closed his eyes, and began to doze away on the soft carpet grass.

He was only half asleep when he heard the flutter of wings. He jumped to a sitting position, reaching for his glasses to clarify his nearsighted blur. Perched on a green stick plant, on the other side of the orange path, was the flying frog-cat. It looked at Tyler out of what appeared to be sheer boredom. It closed its eyes, and huddled itself into a comfortable sleeping position of its own.

Tyler was not totally convinced that this creature was safe, but his exhaustion soon won him over again. He removed his glasses, closed his own eyes, and slept.

It was still dark when Tyler awoke to the sounds of footsteps very close to his head. Needless to say, he lay frozen in the purple fruit. He was both unable and unwilling to move. Tyler knew that his fate had finally come to a bloody end. This was obviously the horrendous monster that would even the score for his incorrect answers. Tyler knew those historic, all-weekend parties with the Theta's would soon be a thing of the past--unless he took immediate action.

He sprang to the side, hopefully away from the footsteps. As Tyler jumped in one direction, something else jumped in the opposite direction. Tyler knew it must be preparing an attack. In the dark, with his glasses deposited somewhere on the red grass, Tyler could see only the blur of a small shadowy creature near the trunk of an umbrella tree. Tyler reached slowly down to the grass, searching for his glasses. He felt naked and vulnerable without them, unable to identify his adversary. He continued searching frantically until the glasses were clutched in his hands. He put them on, slightly askew as always. With cleared eyesight, he saw a small creature cowering near the trunk of the tree. It was not a hideous monster after all. In fact, with long, pointed ears and gray fur, it looked much like the instructor he had seen the previous day. However, this one was slightly more rotund than the instructor and in the dim glow of light it appeared to be dressed in purple clothes rather than the green of the instructor. As it cringed near the trunk of the tree it was also clearly more timid than the instructor.

The timidity of the creature increased Tyler's bravery--somewhat.

"Who are you?" Tyler asked defiantly. "What do you want?"

The creature huddled by the umbrella trunk, shivering like a small frightened dog. Tyler now noticed that the creature was clutching a piece of purple fruit. The significance of this finally dawned onto Tyler. The creature was obviously hungry and, like Tyler, had come to eat. At least Tyler hoped this creature was hungry only for fruit.

Tyler motioned to the fruit. "Go ahead and eat, if you're hungry."

The creature responded eagerly on command. He gobbled the fruit down faster than Tyler thought possible. Then he reached down and grabbed a second. Tyler merely watched, remembering his own ravished state earlier that evening.

The creature eyed Tyler cautiously as he ate. While it physically resembled the instructor, his mannerisms were completely different. The first instructor had been confident and authoritative, one obviously accustomed to asking students a multitude of questions. As Tyler watched this creature gobble the purple fruit, he could not imagine him undertaking such a role. Tyler had been in college long enough to know an instructor when he saw one, and this creature was definitely not an instructor.

When the creature had finished his third fruit, Tyler asked, just to see if he was right "Who are you? Are you an instructor? Is this another test?"

The creature reached for another fruit, and shook his head.

"Then you're not here to ask me any questions?" Tyler continued.

The creature shook his head again and continued to eat.

Still trying to get the creature to respond Tyler asked, "What is your name? Do you have a name?"

At this the creature nodded his head, but continued you eat.

"Well... what is it?" Tyler asked, becoming a little frustrated.

The creature gave a very weak, timid answer, again nothing like the authoritative voice of the instructor. "Aristotle... my name is Aristotle," he said, then continued to eat.

"Aristotle," Tyler repeated, "That's an interesting name. Are you an ancient Greek philosopher?" Tyler chuckled slightly.

Aristotle gave Tyler an unknowing, uncaring look, and kept eating.

Tyler could not decide whether to continue this line of conversation or try another approach. "Can you help me?" he finally asked. "Can you help me get out of here and back home?"

Aristotle shook his head and said meekly, "No... you are a learner. You have to finish your lesson."

The creature plucked up as many of the fruits as he could carry then began to leave.

"Wait," Tyler said, "don't leave. Tell me what's going on here?"

Aristotle said, almost in a whisper, "I can't talk to you. I shouldn't be here. It's not my job. I'm not an instructor. You should talk to instructors. I have to go."

Aristotle moved slowly and quietly toward the darkness of the dense foliage, with an eye towards Tyler, as any prey would watch its predator. But, Tyler made no move towards Aristotle.

After the timid creature disappeared from sight, Tyler was startled once again by the flutter of wings. He turned to see the frog-bird-cat adjusting its position on a green stick. It blinked its eyes once and croaked softly. Then it closed its eyes and returned to its slumbers.

Tyler slept lightly the remainder of the night. He instantly awoke at the slightest of sounds. At the first glimmer of pink sky through the umbrella canopy, Tyler was awake and ready to continue his lesson. His mind had an acute awareness resulting from too little sleep and too much excitement. Even if he wanted to sleep more, his mind would not cooperate. The sooner he was down the path, the sooner he could complete this lesson, and the sooner he could go home with his bags of wealth. After eating several pieces of purple fruit for breakfast, Tyler hoisted the financial burden onto his shoulders, and started to continue his journey down the path.

"Wait," an unfamiliar throaty voice said.

"What?!" Startled, Tyler turned but saw no one, except the flying frog-cat perched on a green stick.

"You should take some fruit," the creature said.

"I should do what...?" Tyler asked, even more surprised to hear a flying frog-cat talk, than to hear a monkey-rabbit speak.

"I know it's not my place, but you should take some fruit with you. There isn't any more around here," the frog-cat continued. "You really should take what you can. If you don't you'll starve."

"Oh, come on..." Tyler protested.

The frog-bird slowly blinked its eyes.

Tyler thought for a moment. He had already spent one day in this place. There was no telling how long he would be here. And if these purple orbs really were the only food....

He looked a few yards down the path. In the immediate vicinity there was an abundance of fruit, then there was none. In this type of situation it seemed best to be safe.

He began to gather the fruit into a small pile, then looked around for some way to carry it. He immediately realized there was only one way to carry the fruit--the two bags currently filled with gems. The thought made him ill. If he wanted to carry the fruit he would have to leave behind some of the gems. But how many?

He pondered his predicament further. He had about fifty pieces of purple fruit gathered into a pile. The previous day he had eaten seven at one sitting, and was more than satisfied. Certainly three or four of these at a meal, three times a day, would satisfy his hunger. If he ate ten fruits a day, the pile of fifty would last him about five days. He counted the fruits to make certain that he had fifty. Surely this would be enough. Tyler could not envision staying here more than five days. The lesson would certainly be over by then, wouldn't it? It had to be. Finals began on Monday. The professor's economics final, the one that got him into this mess, was now only four days away.

He knew he had to leave some of the jewels. But how many? He emptied one of the bags and filled it with the half of the fruit-pile. His stomach grew topsy turvy as he thought of leaving the sparkling gems. After filling the first bag, he still had over two dozen fruit lying on the ground. He grudgingly emptied the contents of the second bag and filled it with the remainder of the fruit. There was no room left for any of the gems.

At this point he hoped that these tiny creatures were not playing a costly joke on him. Wouldn't it be hilarious if he discovered there was plenty of fruit all over this bizarre land of Leornia. He looked at the flying frog-cat perched silently on the glowing stick plant.

He laughed to himself. Yes, some joke. Then he thought of the alternative. If this was not a joke, and this was the only food in Leornia, then five days supply might not be enough. He tried as best he could to squeeze a few more fruit into the bags.

As he stuffed the fruit, and cursed his loss of jewels, the little light of economic enlightenment went on inside his head once again. Tyler recalled the instructor's question about opportunity cost that went unanswered. Glaring at the pile of gems lying on the red grass, he realized the meaning of opportunity cost. Tyler had to give up these gems, this wealth, to carry the fruit. The opportunity cost of carrying the fruit, and insuring a food supply for the days ahead, was this invaluable pile of jewels. It seemed little consolation that he realized that opportunity cost is simply what you have to give up of one thing to get something else. This was a bittersweet realization. While he now understood the concept, he had no wealth. Perhaps if he had correctly answered the question about opportunity cost, he would have been able to keep the jewels. He began to understand a little better how this land of Leornia operated. It was obvious to him why the instructor had given him the bags and jewels--to illustrate the ideas of scarcity and opportunity cost. In the future he would take the questions more seriously.

As he hoisted the load onto his shoulders, the flying frog-cat fluttered its wings and jumped into flight. Tyler began to walk down the path. He partly blamed the composite creature for his loss of wealth. He thought about cursing the frog-cat, but deep down he knew it was not to blame. The lack of sleep from the previous night was making him edgy. His mind's acute alertness was beginning to fade. And as he realized he had overcome the difficult task of identifying opportunity cost, his mind began to relax as he walked--drifting into a daydream.

Given recent events, his daydream took him back to the professor's classroom. Professor Francis kept calling his name. The professor kept asking Tyler for an answer to some question. Of course, as always, Tyler tried to avoid the professor's inquisition. But the professor was so insistent.

Then he realized, that the professor was not calling on him in a distant in the classroom. The professor, was speaking to him in this land of Leornia.

"Tyler, you did well," the professor's voice was saying.

"What?" Tyler stopped and dropped the bags of fruit. He literally and figuratively shook his head.

"You did an excellent job of identifying the opportunity cost of the fruit," the professor continued.

Tyler was pleased with the compliment, but was still trying to shake the fuzz from his mind.

"Uh... thanks," Tyler said.

"You are now ready for your second test," the professor said, "it is a short distance down the path."

"But...," Tyler once again tried to ask about going home as the professor's voice faded. As before, though, he realized it was useless. When the voice was completely gone, a thousand questions popped into Tyler's head. Who or what was that creature named Aristotle? Why was there only a limited amount of fruit? Why was this flying frog-cat following him? How many more tests would he have to take? Was five days worth of fruit enough? But, the questions would have to wait. The professor evidently had another test in store.


Go to: Chapter 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Copyright © 1997, 2002 by Orley M. Amos, Jr. All rights reserved. Not to be quoted without permission of the author.

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