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2. Inputs and outputs Bob's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Bob's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Bob signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Bob's kitchen cannot fit more than three 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, Bo 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 Output (Pizzas) Marginal Product of Labor (Pizzas) (Number of workers) 0 70 2 120 3 160 4 190 5 200 On the following graph, plot Bob'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). ? 200 180 Production Function 160 140 120 100 80 60 40 20 QUANTITY OF OUTPUT (Pizzas) 0 1 00000

2. Inputs and outputs Bob's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Bob's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Bob signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Bob's kitchen cannot fit more than three 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, Bo 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 Output (Pizzas) Marginal Product of Labor (Pizzas) (Number of workers) 0 70 2 120 3 160 4 190 5 200 On the following graph, plot Bob'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). ? 200 180 Production Function 160 140 120 100 80 60 40 20 QUANTITY OF OUTPUT (Pizzas) 0 1 00000

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 42P: A small company that shovels sidewalks and driveways has 100 homes signed up for its services this...
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2. Inputs and outputs Bob's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Bob's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Bob signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Bob's kitchen cannot fit more than three 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 Output (Pizzas) Marginal Product of Labor (Pizzas) (Number of workers) 0 70 2 120 3 160 4 190 5 200 On the following graph, plot Bob'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). (?) 200 180 Production Function 160 140 120 100 80 60 40 20 0 QUANTITY OF OUTPUT (Pizzas) 0 1 3 LABOR (Number of workers) 00000
Transcribed Image Text:2. Inputs and outputs Bob's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Bob's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Bob signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Bob's kitchen cannot fit more than three 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 Output (Pizzas) Marginal Product of Labor (Pizzas) (Number of workers) 0 70 2 120 3 160 4 190 5 200 On the following graph, plot Bob'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). (?) 200 180 Production Function 160 140 120 100 80 60 40 20 0 QUANTITY OF OUTPUT (Pizzas) 0 1 3 LABOR (Number of workers) 00000
Suppose that labor is Bob'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 Bob's total cost curve on the following graph using the quantities from the preceding table. 280 260 240 Total Cost 220 200 180 160 140 120 100 80 60 40 20 0 TOTAL COST (Dollars) 0 20 40 60 80 100 120 140 160 180 200 QUANTITY OF OUTPUT (Pizzas) True or False: The shape of the production function reflects the law of diminishing marginal returns. True False
Transcribed Image Text:Suppose that labor is Bob'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 Bob's total cost curve on the following graph using the quantities from the preceding table. 280 260 240 Total Cost 220 200 180 160 140 120 100 80 60 40 20 0 TOTAL COST (Dollars) 0 20 40 60 80 100 120 140 160 180 200 QUANTITY OF OUTPUT (Pizzas) True or False: The shape of the production function reflects the law of diminishing marginal returns. True False
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