Question

2. Inputs and outputs Jake's Performance Pizza is a small restaurant in New York City that sells gluten-free pizzas. Jake's very tiny kitchen has barely enough room for the four ovens in which his workers bake the pizzas. Jake signed a lease obligating him to pay the rent for the four ovens for the next year. Because of this, and because Jake's kitchen cannot fit more than four ovens, Jake cannot change the number of ovens he uses in his production of pizzas in the short run. However, Jake's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Jake 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. Jake's daily production schedule is presented in the following table. Fill in the blanks to complete the Marginal Physical Product of Labor column for each worker. Number of Workers Output (Pizzas) Marginal Physical Product of Labor (Pizzas) 60 100 150 160

Answer 1

Answer:

In short run, these workers are variable inputs, and ovens are fixed inputs.

Number of workers	Output (Pizzas)	Marginal product of labor (Pizzas) = Change in output
0	0	-
1	60	60-0=60
2	100	100-60=40
3	130	130-100=30
4	150	150-130=20
5	160	160-150=10

QUANTITY OF OUTPUT (Pizzas) LABOR HIRED (Number of workers)

Fixed cost = $20 per day and Jake pays $30 per day to his workers .

Total cost = Fixed cost + variable cost

Number of workers	Output (pizzas)	Variable cost	Fixed cost	Total cost = FC+VC
0	0	0	20	20
1	60	30	20	50
2	100	60	20	80
3	130	90	20	110
4	150	120	20	140
5	160	150	20	170

Total cost curve is shown in the following figure:

Total Cost TOTAL COST (Dollars) 0 20 180 200 40 60 80 100 120 140 160 QUANTITY OF OUTPUT (Pizzas)

FALSE because The shape of the production function reflects the law of decreasing marginal returns.