Tony's Pizza's Production Function Is Shown in the Table Above

question 64

Essay

Tony's Pizza's production function is shown in the table above. Tony currently operates Plant 2. He hires workers at a wage rate of $50 a day and his total fixed cost is $150.
a) Calculate Tony's Pizza's total variable cost and total cost for each output level.
b) Calculate the marginal costs.
c) Calculate the average fixed costs, average variable costs, and average total costs.
d) Suppose that total fixed cost increases to $200. Explain what changes occur in the costs.

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Definitions:

Welfare State

A concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens, through policies and programs.

Economic Growth

An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.

Voter Turnout

The percentage of eligible voters who cast a ballot in a given election.

Institutions

Structures or mechanisms of social order governing the behavior of a set of individuals within a given community.