Valerie's Performance Pizza is a small restaurant in Denver that sells gluten-free pizzas. Valerie's very tiny kitchen has barely enough room for the two ovens in which her workers bake the pizzas. Valerie signed a lease obligating her to pay the rent for the two ovens for the next year. Because of this, and because Valerie's kitchen cannot fit more than two ovens, Valerie cannot change the number of ovens she uses in her production of pizzas in the short run. However, Valerie's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Valerie lets them know how many workers she needs for each day of the week. In the short run, these workers are resources, and the ovens are resources. Valerie'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. Total Product Marginal Product of Labor (Pizzas) Number of Workers (Pizzas) 1 100 180 240 4 280 300 On the following graph, plot Valerie'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 Function 240 210 180 150 120 QUANTITY OF OUTPUT (Pizzas)
Valerie's Performance Pizza is a small restaurant in Denver that sells gluten-free pizzas. Valerie's very tiny kitchen has barely enough room for the two ovens in which her workers bake the pizzas. Valerie signed a lease obligating her to pay the rent for the two ovens for the next year. Because of this, and because Valerie's kitchen cannot fit more than two ovens, Valerie cannot change the number of ovens she uses in her production of pizzas in the short run. However, Valerie's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Valerie lets them know how many workers she needs for each day of the week. In the short run, these workers are resources, and the ovens are resources. Valerie'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. Total Product Marginal Product of Labor (Pizzas) Number of Workers (Pizzas) 1 100 180 240 4 280 300 On the following graph, plot Valerie'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 Function 240 210 180 150 120 QUANTITY OF OUTPUT (Pizzas)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Aplia Homework: Production and Cost in the Firm
(?)
300
270
Production Function
240
210
180
150
120
90
60
30
1.
3.
4
LABOR HIRED (Number of workers)
Suppose that labor is Valerie's only variable cost and that she has a fixed cost of $50 per day and
pays each of her workers $40 per day.
Use the orange points (square symbol) to plot Valerie's total cost curve on the following graph
using the quantities from the preceding table.
300
270
240
Total Cost
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 only when you increase both labor and ovens.
Total output declines as you increase the quantity of labor.
Total output increases at a decreasing rate as you increase the quantity of labor.
QUANTITY OF OUTPUT (Pizzas)
TOTAL COST (Dollars)
Transcribed Image Text:Valerie's Performance Pizza is a small restaurant in Denver that sells gluten-free pizzas. Valerie's
very tiny kitchen has barely enough room for the two ovens in which her workers bake the pizzas.
Valerie signed a lease obligating her to pay the rent for the two ovens for the next year. Because of
this, and because Valerie's kitchen cannot fit more than two ovens, Valerie cannot change the
number of ovens she uses in her production of pizzas in the short run.
However, Valerie's decision regarding how many workers to use can vary from week to week
because her workers tend to be students. Each Monday, Valerie lets them know how many workers
she needs for each day of the week. In the short run, these workers are
resources, and
the ovens are
* resources.
Valerie'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.
Total Product Marginal Product of Labor
Number of Workers (Pizzas)
(Pizzas)
1
100
180
240
280
300
On the following graph, plot Valerie'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).
270
Production Function
240
210
180
150
120
90
QUANTITY OF OUTPUT (Pizzas)
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