Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table below:...
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Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table below: Labor (Workers Per Week) 1 2 3 4 5 Output with Plant 1 1 Oven (Pizzas Per Week) 50 80 100 110 115 Output with Plant 2 - 2 Oven (Pizzas Per Week) 60 130 180 220 240 A) Suppose that Silvia's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvia's entrepreneurship, $1,000 per week. If Silvia's uses Plant 1, what is the marginal product of the 3rd worker (how many pizzas per week)? Show your calculation. B) Suppose Silvia's uses Plant 2. If Silvia hires the 4th worker, will the firm experience be diminishing, increasing, or constant returns? Explain. C) Suppose Silvia's uses Plant 1 and hires 3 workers. What is the firm's average fixed cost? Show your calculation. D) Suppose Silvia's uses Plant 1 and hires 2 workers. What is the firm's average variable cost? Show your calculation. E) Suppose Silvia's uses Plant 2 and hires 4 workers. What is the firm's average total cost? Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table below: Labor (Workers Per Week) 1 2 3 4 5 Output with Plant 1 1 Oven (Pizzas Per Week) 50 80 100 110 115 Output with Plant 2 - 2 Oven (Pizzas Per Week) 60 130 180 220 240 A) Suppose that Silvia's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvia's entrepreneurship, $1,000 per week. If Silvia's uses Plant 1, what is the marginal product of the 3rd worker (how many pizzas per week)? Show your calculation. B) Suppose Silvia's uses Plant 2. If Silvia hires the 4th worker, will the firm experience be diminishing, increasing, or constant returns? Explain. C) Suppose Silvia's uses Plant 1 and hires 3 workers. What is the firm's average fixed cost? Show your calculation. D) Suppose Silvia's uses Plant 1 and hires 2 workers. What is the firm's average variable cost? Show your calculation. E) Suppose Silvia's uses Plant 2 and hires 4 workers. What is the firm's average total cost?
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A To calculate the marginal product of the 3rd worker when using Plant 1 we need to find the change in output pizzas per week when going from 2 worker... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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