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Latasha's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Latasha's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Latasha signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Latasha's kitchen cannot fit more than three ovens, Latasha cannot change the number of ovens she uses in her production of pizzas in the short run. However, Latasha's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Latasha 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. Latasha'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. Output Marginal Product of Labor (Pizzas) Number of Workers (Pizzas) QUANTITY OF OUTPUT (Pizzas) 200 180 160 On the following graph, plot Latasha'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). 140 120 100 HO 60 0 1 ㅎ 2 3 4 0 70 120 160 190 200 Production Function

Latasha's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Latasha's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Latasha signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Latasha's kitchen cannot fit more than three ovens, Latasha cannot change the number of ovens she uses in her production of pizzas in the short run. However, Latasha's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Latasha 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. Latasha'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. Output Marginal Product of Labor (Pizzas) Number of Workers (Pizzas) QUANTITY OF OUTPUT (Pizzas) 200 180 160 On the following graph, plot Latasha'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). 140 120 100 HO 60 0 1 ㅎ 2 3 4 0 70 120 160 190 200 Production Function

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter20: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 2CQ
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2. Inputs and outputs Latasha's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Latasha's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Latasha signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Latasha's kitchen cannot fit more than three ovens, Latasha cannot change the number of ovens she uses in her production of pizzas in the short run. However, Latasha's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Latasha 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. Latasha'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. Output Marginal Product of Labor (Pizzas) Number of Workers (Pizzas) QUANTITY OF OUTPUT (Pizzas) 200 180 160 On the following graph, plot Latasha'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). 140 120 100 80 60 40 20 D 0 0 1 2 1 3 4 5 0 70 120 160 190 200 AAAAA IRED (Number of workers) 4 Production Function
Transcribed Image Text:2. Inputs and outputs Latasha's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Latasha's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Latasha signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Latasha's kitchen cannot fit more than three ovens, Latasha cannot change the number of ovens she uses in her production of pizzas in the short run. However, Latasha's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Latasha 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. Latasha'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. Output Marginal Product of Labor (Pizzas) Number of Workers (Pizzas) QUANTITY OF OUTPUT (Pizzas) 200 180 160 On the following graph, plot Latasha'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). 140 120 100 80 60 40 20 D 0 0 1 2 1 3 4 5 0 70 120 160 190 200 AAAAA IRED (Number of workers) 4 Production Function
Suppose that labor is Latasha's only variable cost and that she has a fixed cost of $10 per day and pays each of her workers $50 per day. Use the orange points (square symbol) to plot Latasha's total cost curve on the following graph using the quantities from the preceding table. ? TOTAL COST (Dollars) 280 260 240 220 200 180 160 140 120 100 80 60 40 20 0 0 20 True 40 60 80 100 120 140 160 180 200 QUANTITY OF OUTPUT (Pizzas) False O True or False: The shape of the production function reflects the law of diminishing marginal returns. Total Cost
Transcribed Image Text:Suppose that labor is Latasha's only variable cost and that she has a fixed cost of $10 per day and pays each of her workers $50 per day. Use the orange points (square symbol) to plot Latasha's total cost curve on the following graph using the quantities from the preceding table. ? TOTAL COST (Dollars) 280 260 240 220 200 180 160 140 120 100 80 60 40 20 0 0 20 True 40 60 80 100 120 140 160 180 200 QUANTITY OF OUTPUT (Pizzas) False O True or False: The shape of the production function reflects the law of diminishing marginal returns. Total Cost
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