Question

Marco's Pizza is a small pizzeria. The firm's short-run production function is described in the table below. Assume that Marco's uses only two inputs to produce pizza: labor and capital (the oven). Marco's cost of labor is $400 per worker per week, and his cost of capital is $500 per week.

Labor (workers per week) |
Output (pizzas per week) |

1 | 74 |

2 | 152 |

3 | 228 |

4 | 296 |

5 | 350 |

6 | 384 |

In the scenario above, the marginal product of Marco's
3^{rd} worker is

pizzas.

In the scenario above, when Marco's produces 228 pizzas per
week, the firm's average total cost is:

$

(Round your answer to 2 digits after the decimal point, e.g.,
6.67)

In the scenario above, when the pizzeria increases its output
from 228 to 296 pizzas, the marginal cost per pizza is:

$

(Round your answer to 2 digits after the decimal point, e.g.,
5.70)

Answer #1

Marginal product of Marco's 3rd worker = (Total output of 3
workers- Total output of 2 workers)= (228-152)= **76
pizzas.**

L | Q | TC=FC+wL | AC=TC/Q | MC=(Change in TC/Change in Q) |

1 | 74 | 900 | 12.16 | - |

2 | 152 | 1300 | (1300/152)=8.55 | (1300-900)/(152-74)= 5.12 |

3 | 228 | 1700 | 7.45 | 5.26 |

4 | 296 | 2100 | 7.09 | 5.88 |

5 | 350 | 2500 | 7.14 | 7.41 |

6 | 384 | 2900 | 7.55 | 11.76 |

When Marco's produces 228 pizzas per week, the firm's average
total cost is **$7.45.**

When the pizzeria increases its output from 228 to 296 pizzas ,
the marginal cost per pizza is **$5.88 i.e
increasing.**

Suppose that production of a firm's output is described by the
following production function Q = K0.25 L0.5
In the short run, the firm's capital is fixed at 10,000. Suppose
further that the market price of the output is $37, and that the
market wage is $25.
What is the Marginal Revenue Product of Labor (MRPL) for the
147th worker?
Enter your answer rounded to the nearest two decimals.

Suppose that production of a firm's output is described by the
following production function
Q = K0.25 L0.5
In the short run, the firm's capital is fixed at 10,000. Suppose
further that the market price of
the output is $70, and that the market wage is $25.
What is the Marginal Revenue Product of Labor (MRPL) for the
129th worker?
Enter your answer rounded to the nearest two decimals.

1. Suppose a short-run production function is described as Q =
30L - 0.05L^2 where L is the number of labors used each hour.
a. Derive the equation for Marginal Product of Labor
b. Determine how much output will the 200th worker
contribute:
c. Determine the amount of labor (L) where output (Q) is
maximized (known as Lmax):
d. If each unit of output (Q) has a marginal revenue (price) of
$5 and the marginal cost of labor is $40...

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

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

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

1. Suppose a short-run production function is described as Q =
2L – (1/800)L^2 where L is the number of labors used each hour. The
firm’s cost of hiring (additional) labor is $20 per hour, which
includes all labor costs. The finished product is sold at a
constant price of $40 per unit of Q.
a. How many labor units (L) should the firm employ per hour
b. Given your answer in a, what is the output (Q) per hour...

true or false?
22) By definition, in the typical firm's short-run production
function all inputs are fixed in amount.
Answer:
23) The law of diminishing returns is a result of the fact
that more and more units of a variable input are being added to a
fixed input. Because of the limitations imposed by the fixed input,
at some point the productivity of additional units of the variable
input must decline.
Answer:
24) So long as marginal cost is greater...

Suppose a short-run production function is described as Q = L –
(1/400)L2where L is the number of labors used each hour.
The firm’s cost of hiring (additional) labor is $16 per hour, which
includes all labor costs. The finished product is sold for $40 per
unit of Q.
c. How many labor units(L)
should the firm employ per hour if they want to maximize profit?
L = 120
f. Suppose that the price of the product is unchanged...

As a firm increases the level of output that it produces,
short-run average fixed cost
rises and then falls.
remains constant since fixed costs are constant.
decreases.
decreases up to a particular level of output and then
increases.
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Question 22 pts
Suppose that a firm is currently producing 500 units of output.
At this level of output, TVC = $1,000 and TFC = $2,500. What is the
firms ATC?
$2
$5
$7
$10
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