2. Inputs and outputs

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

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

Yvette's daily production schedule is presented in the following table.

On the following graph, plot Yvette'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 Yvette's only variable cost and that she has a fixed cost of $50 per day and pays each of her workers $40 per day.

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

True or False: The shape of the production function reflects the law of increasing marginal returns.

True

False

Fill in the blanks to complete the Marginal Product of Labor column for each worker. Hint: Be sure to plot the first point at (0,0). Use the orange points (square symbol) to plot Yvette's total cost curve on the following graph using the quantities from the preceding table