Week 3 Assignment

Problem 1

William is the owner of a small pizza shop and is thinking of increasing products and lowering costs. William’s pizza shop owns four ovens and the cost of the four ovens is $1,000. Each worker is paid $500 per week.

|Workers (V) |No. of |Marginal product |Change in MP |No. of Pizzas/ Employee |Cost/pizza |

| |Pizzas (TP) |(AP)=TP/V |(=DeltaTP/DeltaV) |cost | |

|0 |0 |0 |0 |0 |0 |

|1 |75 |75 |75 |500 |6.67 |

|2 |180 |90 |30 |1,000 |5.56 |

|3 |360 |120 |75 |1500 |4.17 |

|4 |600 |150 |60 |2000 |3.33 |

|5 |900 |180 |60 |2500 |2.78 |

|6 |1140 |190 |-60 |3000 |2.63 |

|7 |1260 |180 |-120 |3500 |2.78 |

|8 |1360 |170 |-20 |4000 |2.94 |

Show all of your calculations and processes. Describe your answer for each question in complete sentences, whenever it is necessary.

In the Law of Variable Proportions, it basically tells us that the number or the total of output will more than likely to increase at the increasing rate at the beginning, and then would eventually increase at a decreasing rate as we add more and variables...