Inputs and outputs Cho\'s Performance Pizza is a small restaurant in San Francis
ID: 2494789 • Letter: I
Question
Inputs and outputs
Cho's Performance Pizza is a small restaurant in San Francisco that sells gluten-free pizzas. Cho's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Cho signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Cho's kitchen cannot fit more than three ovens, Cho cannot change the number of ovens she uses in her production of pizzas in the short run.
However, Cho's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Cho lets them know how many workers she needs for each day of the week. In the short run, these workers are inputs, and the ovens are inputs.
Cho'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.
Number of Workers
Output
Marginal Product of Labor
(Pizzas)
(Pizzas)
On the following graph, plot Cho'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).
Production Function012345200180160140120100806040200QUANTITY OF OUTPUT (Pizzas)LABOR HIRED (Number of workers)
Suppose that labor is Cho's only variable cost and that she has a fixed cost of $20 per day and pays each of her workers $30 per day.
Use the orange points (square symbol) to plot Cho's total cost curve on the following graph using the quantities from the preceding table.
Total Cost020406080100120140160180200200180160140120100806040200TOTAL COST (Dollars)QUANTITY OF OUTPUT (Pizzas)
True or False: The shape of the production function reflects the law of increasing marginal returns.
True
False
Number of Workers
Output
Marginal Product of Labor
(Pizzas)
(Pizzas)
0 0 1 60 2 100 3 130 4 150 5 160Explanation / Answer
no. of workers output marginal product of labour 0 0 0 1 60 60 2 100 40 3 130 30 4 150 20 5 160 10