(Solved): 2. Inputs and outputs Ginny's Performance Pizza is a small restaurant in Dallas that sells gluten-f ...

2. Inputs and outputs

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

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

2. Inputs and outputs

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

However, Ginny's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Ginny 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.

Ginny'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.

On the following graph, plot Ginny'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).

Suppose that labor is Ginny's only variable cost and that she has a fixed cost of $30 per day and pays each of her workers $30 per day.

Use the orange points (square symbol) to plot Ginny's total cost curve on the following graph using the quantities from the preceding table.

The law of diminishing marginal product of labor is demonstrated by which of the following?

1. Total output increases only when you increase both labor and ovens.

2. Total output declines as you increase the quantity of labor.

3. Total output increases at a decreasing rate as you increase the quantity of labor.