2. Inputs and outputs Rina\'s Performance Pizza is a small restaurant in Denver

Question

2. Inputs and outputs

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

FILL IN THE BLANKS

However, Rina's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Rina lets them know how many workers she needs for each day of the week. In the short run, these workers are.............. (variable or fixed) inputs, and the ovens are ....................(fixed or varible)inputs.

Rina'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)

Number of Workers

Output

Marginal Product of Labor

(Pizzas)

(Pizzas)

0 0 1 60 2 100 3 130 4 150 5 160

Explanation / Answer

As number of workers tend to vary from day to day, in short run, these workers are Variable inputs and as Rina cannot change the number of ovens she uses in her production of pizzas in the short run, the ovens are fixed inputs.

Marginal Product of labor = Change in output / change in labor.

BY using the above formula, we can calculate Marginal product of labor in the following table:

Number of Workers Output Marginal Product of Labor (Pizzas) (Pizzas) 0 0 0 1 60 60 2 100 40 3 130 30 4 150 20 5 160 10

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