Silvio's Pizza is a small pizzeria. The firm's production ...

[naturalchemist]

Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above.
 
  Suppose that Silvio's costs include only the cost of renting ovens, which is 100 per oven per week, the labor cost, 280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, 1,000 per week. Suppose Silvio's uses Plant 2. If Silvio hires the 4th worker, the firm will experience ________ marginal returns. A) diminishing
  B) increasing
  C) constant
  D) zero

Question 2

Lee, J Brand, Joe's Jeans, Paper Denim & Cloth, Levi's, Wrangler, and many others are all producers of jeans. J Brand jeans sell for 200 a pair.
 
  Suppose at the short-run profit maximizing quantity, J Brand's ATC was 180 and AVC was 100, which statement is TRUE? A) J Brand will produce in the short and long run.
  B) J Brand will produce in the short run but go out of business in the long run.
  C) J Brand will shut down in the short run and go out of business in the long run.
  D) J Brand will produce in the short run and shut down in the long run.

[kbennett34]

Answer to Question 1

A

Answer to Question 2

A