Unit IV Assignment Worksheet This worksheet is intended to ✓ Solved
This worksheet is intended to help you develop the information you will use to complete your Unit IV Essay. You are expected to include the completed tables in your Unit IV Essay. The additional questions after the tables are intended to help you formulate your ideas concerning what you will write in your essay. Note that just completing this worksheet does not constitute completing the Unit IV Assignment. The information from the worksheet must be incorporated into your essay submission.
Instructions
1. Complete all parts of this Unit IV Assignment Worksheet.
2. Answer the questions listed after the tables; these will help you formulate your ideas for writing the essay part of this unit’s assignment. You are expected to expand on these questions in your writing.
3. Include the tables and your question responses from this worksheet as an appendix at the end of your essay.
Concession Stand Item Sales Table
| Number of Workers per Day | Concession Items Produced per Day | Average Product | Marginal Product | Average Price of Concession Items | Total Value Product | Average Value Product | Marginal Value Product |
|---|---|---|---|---|---|---|---|
| 1 | 120 | 120 | $8.00 | $960.00 | $8.00 | ||
| 2 | 125 | 62.50 | 5 | $8.00 | $1,000.00 | $8.00 | $40.00 |
| 3 | 200 | 66.67 | 75 | $8.00 | $1,600.00 | $8.00 | $600.00 |
| 4 | 250 | 62.50 | 50 | $8.00 | $2,000.00 | $8.00 | $400.00 |
| 5 | 280 | 56 | 30 | $8.00 | $2,240.00 | $8.00 | $240.00 |
| 6 | 290 | 48.33 | 10 | $8.00 | $2,320.00 | $8.00 | $80.00 |
| 7 | 290 | 41.43 | 0 | $8.00 | $2,320.00 | $8.00 | $0.00 |
Questions for Concession Stand Item Sales
1. At what number of workers used per day does the law of diminishing marginal returns begin? How did you determine this number?
2. At what number of workers used per day does negative marginal returns begin? How did you determine this number?
3. What similarities do you see between the shape of the Average Product curve and the Average Value Product Curve?
4. What similarities do you see between the Marginal Product curve and the Marginal Value Product curve?
5. What is the optimal number of workers per day to use at the theater’s concession stand to produce concession stand item sales? How did you determine this optimal number?
Movie Ticket Sales Table
| Number of Workers per Day | Movie Tickets Produced per Day | Average Product | Marginal Product | Average Price of Movie Tickets | Total Value Product | Average Value Product | Marginal Value Product |
|---|---|---|---|---|---|---|---|
| 1 | 120 | 120 | $10.00 | $1200.00 | $10.00 | ||
| 2 | 185 | 92.50 | 65 | $10.00 | $1850.00 | $10.00 | $650.00 |
| 3 | 427 | 142.33 | 242 | $10.00 | $4270.00 | $10.00 | $2420.00 |
| 4 | 631 | 157.75 | 204 | $10.00 | $6310.00 | $10.00 | $2040.00 |
| 5 | 788 | 157.60 | 157 | $10.00 | $7880.00 | $10.00 | $1570.00 |
| 6 | 800 | 133.33 | 12 | $10.00 | $8000.00 | $10.00 | $120.00 |
| 7 | 789 | 112.71 | -11 | $10.00 | $7890.00 | $10.00 | -110.00 |
Questions for Movie Ticket Sales
1. At what number of workers used per day does the law of diminishing marginal returns begin? How did you determine this number?
2. At what number of workers used per day do negative marginal returns begin? How did you determine this number?
3. What is the optimal number of workers per day to produce movie ticket sales? How did you determine this optimal level?
Paper For Above Instructions
The analysis of employee output in the context of service sectors—like a theater's concession stand and ticket sales—is foundational in understanding production economics. The relationship between the number of workers, output, and value generated is impacted by the law of diminishing marginal returns, a critical concept for effective resource management.
1. Diminishing Marginal Returns for Concessions
In the concession stand scenario, the law of diminishing marginal returns begins after 2 workers per day. Initially, with the addition of a second worker, output rose significantly—allowing for increased production from 120 to 125 concession items. However, the third worker results in a marginal product of 75, which suggests that the additional output is not increasing as efficiently as the previous. The increase in marginal returns, therefore, begins to slow indicating diminishing returns.
2. Negative Marginal Returns for Concessions
Negative marginal returns were observed starting with the seventh worker. This can be deduced as the marginal product dropped to zero when output remained constant at 290 items even with the addition of more labor. This exemplifies inefficiency where additional labor does not contribute positively but rather stagnates output.
3. Diminishing Marginal Returns for Movie Tickets
In the context of movie ticket sales, diminishing marginal returns begin with the addition of the fourth worker. This number can be derived from the analysis of the marginal product, which increases significantly with the second and third workers, yet from the fourth to the fifth, the marginal product rises less (from 204 to 157) indicating that while output is increasing, it is approaching the limit of efficient resource use.
4. Negative Marginal Returns for Movie Tickets
Similar to the concession stand, negative marginal returns start with the seventh worker when output declines. This can be observed as marginal returns decrease from -11 tickets produced per day, which signals inefficiency in resource allocation. Such a decrease indicates that adding further resources (in the form of labor) beyond an optimal point leads to inefficiencies.
5. Optimal Number of Workers
Determining the optimal number of workers for both scenarios requires analyzing total value product in relation to cost. For the concession stand, 5 workers seem optimal as further additions do not enhance productivity significantly and result in negative productivity. Conversely, for movie tickets, the ideal number appears to be around 5 as well, where returns are maximized before diminishing returns begin to emerge. This balance optimizes operations and ensures each worker contributes effectively to increasing output.
Conclusion
Efficient workforce management is pivotal in maximizing production value and minimizing costs across service-oriented businesses. By assessing labor impact on product output, we draw insights into resource allocation strategies that underscored the importance of balancing workforce investment against the returns generated therein.
References
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- Marshall, A. (1890). Principles of Economics.
- Krugman, P., & Wells, R. (2018). Economics.
- Goolsbee, A., Levitt, S. D., & Syverson, C. (2018). Microeconomics.
- Varian, H. R. (2010). Intermediate Microeconomics: A Modern Approach.
- Pindyck, R. S., & Rubinfeld, D. L. (2017). Microeconomics.
- Taylor, T. (2018). Principles of Economics.
- Blanchard, O. (2017). Macroeconomics.
- Stiglitz, J. E., & Walsh, C. E. (2017). Principles of Macroeconomics.
- Boclips. (2020). Understanding Diminishing Returns.