You Have Been Hired by the Tootsie Roll Company to Analyze

question 8

Essay

You have been hired by the Tootsie Roll Company to analyze their production process. Your predecessor in the position left you with the following table: $$\begin{array} { | c | c | l | c | } \hline \text { Number of Workers } & \begin{array} { c } \text { Total Output } \\\text { (thousands of bags of } \\\text { Tootsie Rolls) }\end{array} & \text { Marginal Product } & \begin{array} { c } \text { Average } \\\text { Product }\end{array} \\\hline 0 & 0 & & \\\hline 1 & 4 & & \\\hline 2 & 10 & & \\\hline 3 & 17 & & \\\hline 4 & 23 & & \\\hline 5 & 28 & & \\\hline 6 & 31 & & \\\hline 7 & 32 & & \\\hline 8 & 32 & & \\\hline 9 & 30 & & \\\hline 10 & 25 & & \\\hline\end{array}$$ (NOTE: Marginal product represents changes between numbers of workers. Therefore, leave the first row blank in the "Marginal Product" column and put the marginal product from 0 workers to 1 worker in the second row of that column.)
(a) Fill in the blank values in the table above.
(b) Do the values in the table represent short-run or long-run production relationships? Explain.
(c) Are these production values consistent with the law of diminishing marginal productivity? Explain.
(Extra Credit: Between what levels of output is the firm most likely to operate? Explain your answer.)

---

Definitions:

Perceptual Process

The sequence of steps that involves receiving, selecting, organizing, interpreting, and responding to sensory information.

Social Learning Theory

A theory that posits individuals learn behaviors, norms, and values by observing and imitating the actions of others.

Continuous Reinforcement

A method of learning that involves providing a reward or positive outcome every time a desired behavior is performed.

Categorical Thinking

involves organizing or classifying information and experiences into categories to simplify and speed up the decision-making process.