Question

Homework (Ch 13) Bob's Performance Pizza is a small restaurant in New York City that sells gluten free pizzas. Bob's very tiny kitchen has barely enough room for the four ovens in which his workers bake the pizzas. Bob signed a lease obligating him to pay the rent for the four ovens for the next year. Because of this, and because Bob's kitchen cannot fit more than four ovens, Bob cannot change the number of ovens he uses in his production of pizzas in the short run. However, Bob's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Bob lets them know how many workers he needs for each day of the week. In the short run, these workers are inputs, and the ovens are inputs. Bob's daily production schedule is presented in the following table. Fill in the blanks to complete the Marginal Product of Labor column for each worker. Labor (Number of workers) Output (Pizza) 0 Marginal Product of Labor (Pizzas)

Answer 1

workers are covers are variable infuts and the fixed infuts, OTP HP of L 0 50 150 o - No 90 120 . 140 150 140 [ 30 120 Tlol MP = ATP 102 140+ 1204 1 bo+ 80 Production function (Total Product curve) Got 20f 1 2 FC = $30 Total Cost = fctve 3 4 5 (L) ve = $30 -TP (ТС) 71601 (Total Cost Curve hot 120+ 0 30t0 = 30 50 30+(3 081)=60 30 + 30x2) = 90 30 + (30x3) = 120 30 + (30 x 4) = 150 150 30t (30x5)= 180 9120 30 + (30 x 4 100 8oF 6ot 40t 207 0 20 40 60 80 10 10 140 160 60 80 10 10 10 16 OJTA

TRUE ( Short-run production functions typically exhibit a shape like this due to the phenomenon of diminishing marginal product of labor : downward curved )