question 1: Valerie's Performance Pizza is a small restaurant in Montreal that sells gluten-free pizzas. Valerie's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Valerie signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Valerie's kitchen cannot fit more than three ovens, Valerie cannot change the number of ovens she uses in her production of pizzas in the short run.

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

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

Fill in the blanks to complete the Marginal Product of Labour column for each

Number of Workers	Output	Marginal Product of Labour
(Pizzas)	(Pizzas)
0	0
1	20
2	100
3	140
4	180
5	200

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

-On the following graph, plot Valerie'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)

-Use the orange points (square symbol) to plot Valerie'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

question 2 : Douglas Fur is a small manufacturer of fake-fur boots in Calgary. The following table shows the company's total cost of production at various production quantities.

in the remaining cells of the table.

Quantity	Total Cost	Marginal Cost	Total Fixed Cost	Variable Cost	Average Variable Cost	Average Total Cost
(Pairs)	(Dollars)	(Dollars)	(Dollars)	(Dollars)	(Dollars per pair)	(Dollars per pair)
0	120
1	200
2	240
3	285
4	340
5	425
6	540

On the following graph, plot Douglas Fur's average total cost (ATCATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVCAVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MCMC) curve using the orange points (square symbol). (Hint: For ATCATCand AVCAVCcurves, plot the points on the integer; for example, the average total cost of producing one pair of boots is $200, so you should start your ATC curve by placing a green point at (1, 200). For marginal cost, plot the points between the integers; for example, the marginal cost of increasing production from zero to one pair of boots is $80, so you should start your MC curve by placing an orange square at (0.5, 80).)Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.