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

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

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Tim's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Tim's very tiny kitchen has barely enough room for the two ovens in which his workers bake the pizzas. Tim signed a lease obligating him to pay the rent for the two ovens for the next year. Because of this, and because Tim's kitchen cannot fit more than two ovens, Tim cannot change the number of ovens he uses in his production of pizzas in the short run.

Use the orange points (square symbol) to plot Tim's total cost curve on the following graph using the quantities from the preceding table. 300 270 Total Cost 240 210 180 150 120 90 60 30 30 60 90 120 150 180 210 240 270 300 QUANTITY OF OUTPUT (Pizzas) The law of diminishing marginal product of labor is demonstrated by which of the following? Total output increases at a decreasing rate as you increase the quantity of labor. O Total output increases only when you increase both labor and ovens. O Total output declines as you increase the quantity of labor. TOTAL COST (Dollars)
Transcribed Image Text:Use the orange points (square symbol) to plot Tim's total cost curve on the following graph using the quantities from the preceding table. 300 270 Total Cost 240 210 180 150 120 90 60 30 30 60 90 120 150 180 210 240 270 300 QUANTITY OF OUTPUT (Pizzas) The law of diminishing marginal product of labor is demonstrated by which of the following? Total output increases at a decreasing rate as you increase the quantity of labor. O Total output increases only when you increase both labor and ovens. O Total output declines as you increase the quantity of labor. TOTAL COST (Dollars)
Tim's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Tim's very tiny kitchen has barely enough room for the two ovens in which his workers bake the pizzas. Tim signed a lease obligating him to pay the rent for the two ovens for the next year. Because of this, and because Tim's kitchen cannot fit more than two ovens, Tim cannot change the number of ovens he uses in his production of pizzas in the short run. However, Tim's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Tim lets them know how many workers he needs for each day of the week. In the short run, these workers are variable v resources, and the ovens are fixed v resources. Tim's daily production schedule is presented in the following table. Fil in the blanks to complete the Marginal Product of Labor column for each worker. Total Product Marginal Product of Labor Number of Workers (Pizzas) (Pizzas) 100 1 100 80 2 180 60 3 240 40 4 280 20 300 On the following graph, plot Tim'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). 300 270 Production Funcian 240 210 180 150 120 90 60 30 1 3 LABOR HIRED (Number of workers) Suppose that labor is Tim's only variable cost and that he has a fixed cost of $50 per day and pays each of his workers $40 per day. QUANTITY OF OUTPUT (Pizzas) AAAAA
Transcribed Image Text:Tim's Performance Pizza is a small restaurant in Chicago that sells gluten-free pizzas. Tim's very tiny kitchen has barely enough room for the two ovens in which his workers bake the pizzas. Tim signed a lease obligating him to pay the rent for the two ovens for the next year. Because of this, and because Tim's kitchen cannot fit more than two ovens, Tim cannot change the number of ovens he uses in his production of pizzas in the short run. However, Tim's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Tim lets them know how many workers he needs for each day of the week. In the short run, these workers are variable v resources, and the ovens are fixed v resources. Tim's daily production schedule is presented in the following table. Fil in the blanks to complete the Marginal Product of Labor column for each worker. Total Product Marginal Product of Labor Number of Workers (Pizzas) (Pizzas) 100 1 100 80 2 180 60 3 240 40 4 280 20 300 On the following graph, plot Tim'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). 300 270 Production Funcian 240 210 180 150 120 90 60 30 1 3 LABOR HIRED (Number of workers) Suppose that labor is Tim's only variable cost and that he has a fixed cost of $50 per day and pays each of his workers $40 per day. QUANTITY OF OUTPUT (Pizzas) AAAAA
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