Question

The production function of a restaurant includes items such as labor (i.e., cooks, waiters, a manager), capital (i.e., ovens, counters, tables, chairs, and a building), and land. In the short run, the owner of the restaurant will optimize production by employing a variable amount of _________ given a fixed amount of ___________.

a. labor, capital and raw materials
b. capital, labor and land
c. land, capital and labor
d. land, labor and raw materials
e. labor, capital and land

Answer 1

correct option is e

first blank contains labor, second blank contain capital and land

Step-by-step explanation:

The production feature describes the relationship among production inputs and outputs. Assume at least one fixed output-input variable in the short-run output function. Therefore, labor is the variable source in the short-run production model, and remaining of the factor inputs are fixed inputs.

In the statement provided, a restaurant's manufacturing role is a process involves labor (including waiters, cooks, a manager), capital (including table, chairs, counters, and building) and property. If the restaurant owner wants to maximize brief-run production, then he has to use labor as a flexible source, and capital and land as set inputs.

therefore, first blank contains labor, second blank contain capital and land