Aliyah's Pizzas is a takeout-only pizza parlor servicing the college campus of Madison that specializes in vegan pizzas. Allyah's small shop has barely enough room for customers to stand and wait, let alone the four pizza ovens necessary to keep up with the hungry student customers. Allyah signed a lease renting both the four ovens and the storefront for the next year. Due to the terms of the lease and the building's size constraint, Allyah is unable to change the store's number of pizza ovens in the short run.

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Chapter1: Making Economics Decisions
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2. Inputs and outputs
Aliyah's Pizzas is a takeout-only pizza parlor servicing the college campus of Madison that specializes in vegan pizzas. Allyah's small shop has barely
enough room for customers to stand and wait, let alone the four pizza ovens necessary to keep up with the hungry student customers. Allyah signed a
lease renting both the four ovens and the storefront for the next year. Due to the terms of the lease and the building's size constraint, Allyah is unable
to change the store's number of pizza ovens in the short run.
However, Allyah does face a decision regarding the number of employees to schedule on a weekly basis. Every Sunday, Aliyah contacts the staff to
communicate the amount of workers needed on each day of the upcoming week. In the short run, the store employees are variable inputs, and
pizza ovens are fixed Inputs,
The following table presents Allyah's daily production schedule.
Fill in the blanks to complete the Marginal Product of Labor column for each worker.
Labor
Output Marginal Product of Labor
(Number of workers) (Pizzas) (Pizzas)
QUANTITY OF OUTPUT (Pizzas)
200
180
160
On the following graph, plot Allyah'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).
140
120
100
80
60
40
20+
0
200
180
160
140
120
100
ВО
60
Suppose that Allyah's only variable cost is labor. Assume that Allyah faces daily fixed costs of $20 and pays all workers the same dally wage of $30.
40
0
Use the orange points (square symbol) to plot Allyah's total cost curve on the following graph using the quantities from the preceding table.
20
0
0
0
1
-
2
3
20
4
5
O True
0
60
100
130
150
160
False
LABOR (Number of workers)
5
60
40
30
20
10
Production Function
40 60 80 100 120 140 160 180 200
QUANTITY OF OUTPUT (Pizzas)
(?)
-0-
Total Cost
True or False: The shape of the production function reflects the law of increasing marginal returns.
Transcribed Image Text:2. Inputs and outputs Aliyah's Pizzas is a takeout-only pizza parlor servicing the college campus of Madison that specializes in vegan pizzas. Allyah's small shop has barely enough room for customers to stand and wait, let alone the four pizza ovens necessary to keep up with the hungry student customers. Allyah signed a lease renting both the four ovens and the storefront for the next year. Due to the terms of the lease and the building's size constraint, Allyah is unable to change the store's number of pizza ovens in the short run. However, Allyah does face a decision regarding the number of employees to schedule on a weekly basis. Every Sunday, Aliyah contacts the staff to communicate the amount of workers needed on each day of the upcoming week. In the short run, the store employees are variable inputs, and pizza ovens are fixed Inputs, The following table presents Allyah's daily production schedule. Fill in the blanks to complete the Marginal Product of Labor column for each worker. Labor Output Marginal Product of Labor (Number of workers) (Pizzas) (Pizzas) QUANTITY OF OUTPUT (Pizzas) 200 180 160 On the following graph, plot Allyah'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). 140 120 100 80 60 40 20+ 0 200 180 160 140 120 100 ВО 60 Suppose that Allyah's only variable cost is labor. Assume that Allyah faces daily fixed costs of $20 and pays all workers the same dally wage of $30. 40 0 Use the orange points (square symbol) to plot Allyah's total cost curve on the following graph using the quantities from the preceding table. 20 0 0 0 1 - 2 3 20 4 5 O True 0 60 100 130 150 160 False LABOR (Number of workers) 5 60 40 30 20 10 Production Function 40 60 80 100 120 140 160 180 200 QUANTITY OF OUTPUT (Pizzas) (?) -0- Total Cost True or False: The shape of the production function reflects the law of increasing marginal returns.
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