You Own a Pizza Shop Called "Pizzas'R' Us How Many Cooks Should You Hire to Maximize Your Net

question 106

Multiple Choice

You own a pizza shop called "Pizzas'R' Us".Currently you are paying your cooks an hourly wage of $20.You sell a medium pizza for $10.By hiring more cooks,you can increase your pizza production as shown in the following table. $$\begin{array} { | l | l | } \hline \begin{array} { l } \text { Number of } \\\text { cooks }\end{array} & \begin{array} { l } \text { Total production of } \\\text { pizzas each hour }\end{array} \\\hline 0 & 0 \\\hline 1 & 4 \\\hline 2 & 7 \\\hline 3 & 9 \\\hline 4 & 10 \\\hline 5 & 10 \\\hline\end{array}$$
How many cooks should you hire to maximize your net benefit?

• A)1
• B)3
• C)4
• D)5

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Definitions:

Imports

Goods or services brought into one country from another for sale or use.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing between options.

Comparative Advantage

The ability of an individual, firm, or country to produce a certain good or service at a lower opportunity cost than others.

Trade Deficit

The economic condition that arises when a country imports more goods and services than it exports.