Charles's Performance Pizza is a small restaurant in Houston that sells gluten-free pizzas. Charles's very tiny kitchen has barely enough room for the two ovens in which his workers bake the pizzas. Charles signed a lease obligating him to pay the rent for the two ovens for the next year. Because of this, and because Charles's kitchen cannot fit more than two ovens, Charles cannot change the number of ovens he uses in his production of pizzas in the short run. However, Charles's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Charles lets them know how many workers he needs for each day of the week. In the short run, these workers are variable v inputs, and the ovens are fixed v inputs. Charles's daily production schedule is presented in the following table.

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Chapter1: Making Economics Decisions
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On the following graph, plot Charles'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).

### Graph 1: Production Function
- **X-axis:** Labor (Number of workers)
- **Y-axis:** Quantity of Output (Pizzas)

**Graph Details:**
There is a grid with labeled axes. The production function points will be displayed with green triangles, showing the relationship between the number of workers and the quantity of pizzas produced.

Suppose that labor is Charles’s only variable cost and that he has a fixed cost of $50 per day and pays each of his workers $40 per day.

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

### Graph 2: Total Cost
- **X-axis:** Quantity of Output (Pizzas)
- **Y-axis:** Total Cost (Dollars)

**Graph Details:**
Another grid with labeled axes. The total cost curve points will be displayed with orange squares, representing the relationship between the quantity of output and total cost.

### Question
The law of diminishing marginal product of labor is demonstrated by which of the following?

- [ ] Total output increases only when you increase both labor and ovens.
- [ ] Total output increases at a decreasing rate as you increase the quantity of labor.
- [ ] Total output declines as you increase the quantity of labor.
Transcribed Image Text:On the following graph, plot Charles'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). ### Graph 1: Production Function - **X-axis:** Labor (Number of workers) - **Y-axis:** Quantity of Output (Pizzas) **Graph Details:** There is a grid with labeled axes. The production function points will be displayed with green triangles, showing the relationship between the number of workers and the quantity of pizzas produced. Suppose that labor is Charles’s only variable cost and that he has a fixed cost of $50 per day and pays each of his workers $40 per day. Use the orange points (square symbols) to plot Charles's total cost curve on the following graph using the quantities from the preceding table. ### Graph 2: Total Cost - **X-axis:** Quantity of Output (Pizzas) - **Y-axis:** Total Cost (Dollars) **Graph Details:** Another grid with labeled axes. The total cost curve points will be displayed with orange squares, representing the relationship between the quantity of output and total cost. ### Question The law of diminishing marginal product of labor is demonstrated by which of the following? - [ ] Total output increases only when you increase both labor and ovens. - [ ] Total output increases at a decreasing rate as you increase the quantity of labor. - [ ] Total output declines as you increase the quantity of labor.
**Educational Content on Charles's Pizza Production**

Charles's Performance Pizza is a small restaurant in Houston specializing in gluten-free pizzas. The kitchen is compact, limiting space to just two ovens for baking. Charles has committed to a lease requiring payment for these ovens for a year, setting a fixed number of ovens in the short run due to space limitations.

Workers, primarily students, are hired on a flexible schedule determined weekly by Charles, making labor a variable input. 

The table below shows Charles's daily production schedule, depicting the relationship between the number of workers and pizza output:

| Labor (Number of workers) | Output (Pizzas) | Marginal Product of Labor (Pizzas) |
|---------------------------|-----------------|-----------------------------------|
| 0                         | 0               |                                   |
| 1                         | 100             |                                   |
| 2                         | 180             |                                   |
| 3                         | 240             |                                   |
| 4                         | 280             |                                   |
| 5                         | 300             |                                   |

**Instructions:** Calculate the Marginal Product of Labor for each level of labor. The Marginal Product of Labor is the additional number of pizzas produced when an additional worker is hired. Fill in the blanks with these values.
Transcribed Image Text:**Educational Content on Charles's Pizza Production** Charles's Performance Pizza is a small restaurant in Houston specializing in gluten-free pizzas. The kitchen is compact, limiting space to just two ovens for baking. Charles has committed to a lease requiring payment for these ovens for a year, setting a fixed number of ovens in the short run due to space limitations. Workers, primarily students, are hired on a flexible schedule determined weekly by Charles, making labor a variable input. The table below shows Charles's daily production schedule, depicting the relationship between the number of workers and pizza output: | Labor (Number of workers) | Output (Pizzas) | Marginal Product of Labor (Pizzas) | |---------------------------|-----------------|-----------------------------------| | 0 | 0 | | | 1 | 100 | | | 2 | 180 | | | 3 | 240 | | | 4 | 280 | | | 5 | 300 | | **Instructions:** Calculate the Marginal Product of Labor for each level of labor. The Marginal Product of Labor is the additional number of pizzas produced when an additional worker is hired. Fill in the blanks with these values.
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