Question

Antonio's Performance Pizza is a small restaurant in San Diego that sells gluten-free pizzas. Antonio's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas.

 2. Inputs and outputs

 Antonio's Performance Pizza is a small restaurant in San Diego that sells gluten-free pizzas. Antonio's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Antonio signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Antonio's kitchen cannot fit more than three ovens, Antonio cannot change the number of ovens he uses in his production of pizzas in the short run.

 However, Antonio's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday,

 Antonio 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.

 Antonio'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.

image.png

 On the following graph, plot Antonio's production function using the green points (triangle symbol).

 Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 

Hint: Be sure to plot the first point at (0, 0).

image.png

 Suppose that labor is Antonio's only variable cost and that he has a fixed cost of $10 per day and pays each of his workers $50 per day.

 Use the orange points (square symbol) to plot Antonio's total cost curve on the following graph using the quantities from the preceding table.

image.png


 True or False: The shape of the production function reflects the law of diminishing marginal returns. 

  •  True

  •  False

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Answer #1

In the short runs,workers are variable inputs and the ovens are fixed inputs

Workers Output MPL
0 0
1 70 70
2 120 50
3 160 40
4 190 30
5 200 10

FC=10 and each labor cost = 50

Workers Output FC VC TC
0 0 10 0 10
1 70 10 50 60
2 120 10 100 110
3 160 10 150 160
4 190 10 200 210
5 200 10 250 260

The last statement is True

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