Question

Shen's Performance Pizza is a small restaurant in Philadelphia that sells gluten-free pizzas. Shen's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Shen signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Shen's kitchen cannot fit more than three ovens, Shen cannot change the number of ovens he uses in his production of pizzas in the short run. However, Shen's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Shen lets them know how many workers he needs for each day of the week. In the short run, these workers are VARIABLE/ OR FIXED inputs, and the ovens are VARIABLE/ OR FIXED inputs.
Shen'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
NUMBER OF WORKERS OUTPUT (PIZZAS) MARGINAL PRODUCT OF LABOR (PIZZZAS)
0 0
1 100
2 180
3 240
4 280
5 300

Answer 1

Answer:

In the short run, these workers are VARIABLE inputs, and the ovens are  FIXED inputs.

NUMBER OF         OUTPUT (PIZZAS)                 MARGINAL PRODUCT

WORKERS                                                           OF LABOR (PIZZAS)

0                                     0                                                    -

1                                    100                                               100

2                                   180                                                 80

3                                  240                                                 60

4                                  280                                                 40

5                                  300                                                20

Marginal product of labor is how much does total output change if one additional unit of labor is employed. The formula used to calculate it = total output with n+1 workers  minus total output with n workers.