Question

2. Inputs and outputs Ginny's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Ginny's very tiny kitchen has barely enough room for the two ovens in which her workers bake the pizzas. Ginny signed a lease obligating her to pay the rent for the two ovens for the next year. Because of this, and because Ginny's kitchen cannot fit more than two ovens, Ginny cannot change the number of ovens she uses in her production of pizzas in the short run However, Ginny's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Ginny lets them know how many workers she needs for each day of the week. In the short run, these workers are are inputs, and the ovens ▼ inputs. variable Ginny's daily production schedule is presented in the following table. fixed Fill in the blanks to complete the Marginal Product of Labor column for each worker. Outpt Marginal Product of Labor Number of Workers (Pizzas) (Pizzas) 50 90 120 140 150 4

Answer 1

Answer to blank 1: Variable

Answer to blank 2: Fixed

No. of workers	Output	MPL
0	0
1	50	50
2	90	40
3	120	30
4	140	20
5	150	10

160 140 120 100 80 60 40 Production Function 20 4 Labor hired (Number of workers)

No. of workers (L)	Output	FC($)	VC($) = $30 * L	TC($) = FC + VC
0	0	30	0	30
1	50	30	30	60
2	90	30	60	90
3	120	30	90	120
4	140	30	120	150
5	150	30	150	180

200T 180 160 140 120 o 100 80 60 40 20 Total cost 0 20 4 60 80100 120 140 160 Quantity of Output (Pizzas)

Ans:Total output increases at a decreasing rate as you increase the quantity of labor.