Question

Kyoko's Performance Pizza is a small restaurant in Detroit that sells gluten-free pizzas. Kyoko's very tiny kitchen has barely enough room for the four ovens in which her workers bake the pizzas. Kyoko signed a lease obligating her to pay the rent for the four ovens for the next year. Because of this, and because Kyoko's kitchen cannot fit more than four ovens, Kyoko cannot change the number of ovens she uses in her production of pizzas in the short run. However, Kyoko's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Kyoko 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.

Answer 1

Answer: variable; fixed

Explanation: In the short run, Kyoko's workers are variable inputs. This is because, the number of workers needed can be varied based on production needs, even in the short run. Examples are energy, labor etc.

Kyoko's ovens are fixed inputs. Fixed inputs are those inputs whose quantities cannot be changed in the short run by a firm as it seeks to change the quantity of output produced. Examples are equipment, land and building.