Question

Cho's Performance Pizza is a small restaurant in Miami that sells gluten-free pizzas. Cho's very tiny kitchen has barely enough room for the three ovens in which her workers bake the pizzas. Cho signed a lease obligating her to pay the rent for the three ovens for the next year. Because of this, and because Cho's kitchen cannot fit more than three ovens, Cho cannot change the number of ovens she uses in her production of pizzas in the short run. However, Cho's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Cho lets them know how many workers she needs for each day of the week. In the short run, these workers are __________ inputs, and the ovens are __________ inputs.

Answer 1

Answer: Variable ... Fixed

Explanation:

In the short run, Variable Inputs or costs are known as those which can be changed and their quantities can be varied. In this scenario, the employees that Cho's uses can be varied and so are the Variable Inputs.

Similarly, those costs that cann ot be changed or varied in the short run are rightly known as Fixed Inputs. Cho's Kitchen cannot take more than 3 ovens and also she has already signed a lease for them. These costs cannot be changed and so make the oven a Fixed Input.

It is worthy of note that in the long term, all Costs are considered Variable.