Question

Brian's Performance Pizza is a small restaurant in New York City that sells gluten-free pizzas. Brian's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Brian signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Brian's kitchen cannot fit more than three ovens, Brian cannot change the number of ovens he uses in his production of pizzas in the short run.

However, Brian's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Brian lets them know how many workers he needs for each day of the week. In the short run, these workers are_______ inputs and the ovens are_______ inputs.

Answer 1

Workers at Brian's Performance Pizza are variable inputs since their numbers can change weekly, while the ovens are fixed inputs due to the lease agreement and spatial constraints.

Step-by-step explanation:

In Brian's Performance Pizza, in the scenario described, the workers are considered to be variable inputs because their number can be adjusted relatively quickly and easily depending on the demand and workload. On the other hand, the ovens that Brian leased are fixed inputs, as their number cannot be changed in the short run due to the space limitations and the lease agreement.

The distinction between these types of inputs is important for understanding how businesses adjust to changing conditions in the short term. Variable inputs like workers and ingredients can be modified to match production needs, whereas fixed inputs such as equipment leases and building space set constraints on the maximum output capacity in the short run.

To put this into the language of economics, we could express the production function as Q = f[L, K], where L represents the variable inputs like workers, and K represents the fixed inputs like the ovens.

Answer 2

Variable and Fixed

Step-by-step explanation:

Variable inputs are those which can be changed/altered in the short-run. The demand for these inputs can be changed with a change in production.

However, fixed inputs are those inputs which cannot be changed/altered in the short-run. The demand for these inputs remains unchanged in the short-run. It can only be changed in the long-run.

Since Brain has signed a lease obligation for the next three years, it cannot change the number of ovens in the short-run. This number of oven's is a fixed input at least for three years.

While, Brain can easily change the number of workers he wants to hire. Therefore, number of workers is a variable input in the short-run.

Thus, we can conclude that in the short run, these workers are variable inputs and the ovens are fixed inputs.