Final Answer:
a. When the owner hires 4 workers, the average product of labor is 19.25 pizzas.
b. The marginal product of the fifth worker is 5 pizzas.
c. If the marginal product of the second worker is 6, then the total number of pizzas produced when 2 workers are hired is 20 pizzas.
d. Assuming the marginal product of the second worker is 6, the law of diminishing marginal returns sets in with the third worker.
Step-by-step explanation:
In part (a), the average product of labor is calculated by dividing the total output by the number of workers. When 4 workers are hired, the total output is 77 pizzas, and the average product of labor is 77/4 = 19.25 pizzas.
In part (b), the marginal product of the fifth worker is determined by finding the difference in total output when 5 workers are employed compared to when 4 workers are employed. The marginal product is 5 pizzas, indicating the additional output contributed by the fifth worker.
In part (c), the total number of pizzas produced when 2 workers are hired is found by adding the marginal product of the second worker (given as 6) to the total output when 1 worker is employed. This results in 14 + 6 = 20 pizzas.
In part (d), the law of diminishing marginal returns is observed when the marginal product of the second worker is given as 6, but the marginal product of the third worker (not provided) is less than 6.
This signifies that as more workers are added, the increase in output per additional worker diminishes, aligning with the principle of diminishing marginal returns in production economics.