11-R2

PRODUCTIVITY DATA

STUDENT NAME: Joaquín Amaya García de Acevedo

ROUND 4
ROUND1 ROUND 2 ROUND 3 (MORE
INVESTMENT)
1. Number of workers 1 2 3 3

2. Wages ($400 per worker) $400.00 $800 $1200 $1200

3. Factory rental (desks -physical
$400.00 $400.00 $400.00 $800.00
infrastructure). FIXED CAPITAL
4. Capital goods (number of pens
or scisors) VARIABLE 1 2 3 3
CAPITAL.
5. Investment in capital goods
$50.00 $100 $150 $150
($50.00 per pen or scisors)
6. Number of pizzas accepted 8 25 45 90

7. Number of pizzas rejected 5 6 3 0

8. Cost of materials ($40 per
pizza produced – accepted and $520.00 $1240 $1920 $3600
rejected)
9. Total Cost of pizzas
Wages (line 2) + rent (line 3) +
$1,370.00 $2540 $3670 $5750
investment in capital goods (line
5) + cost of materials (line 8)
10. Average cost of pizzas
accepted (unit cost)
$171.25 $101.60 $81.60 $63.90
Divide Total cost (line 9) by
number of accepted pizzas.
11. Average fixed cost: Divide
Fixed Cost (line 3) by accepted $56.25 $16 $8.90 $8.90
pizzas -line 6)
12. Average variable cost (sum of
lines 2, 5, and 8, divided by $115.00 $85.60 $72.70 $55.00
accepted pizzas)

From High School Economics, © 2022, by Mexican Council for Economic and Financial Education, CMEEF, Mexico.  All
rights reserved. Material prepared by Jaime M. Velázquez, Ph.D. Authorized for classroom use only.  May not be published
or reprinted without written permission from CMEEF.
 11-R2
13. Labor Productivity:
production per worker in 2
minutes 8 12.5 15 30
Pizzas accepted (line 6) divided
by number of workers (line 1)

Answer the following questions:

1. Complete the entire table.

2. Graph Total Cost on the Y's axis and Production on the X axis. Briefly
explain.

We can see an exponential increase in production as there are more people working up to the
third round but in the fourth round, we can see an increase in production by the rent of more
desks. The acquisition of more workers and desks has increased the cost of production.

From High School Economics, © 2022, by Mexican Council for Economic and Financial Education, CMEEF, Mexico.  All
rights reserved. Material prepared by Jaime M. Velázquez, Ph.D. Authorized for classroom use only.  May not be published
or reprinted without written permission from CMEEF.
 11-R2
3. Graph the unit cost or average cost in Y and production in X. Briefly
explain.

Because of the high production that is made in the last rounds, the cost of production for each pizza is
lower, the rent and materials are used more efficiently.

4. Explain why production moved as it did, including a comment on waste

behavior. Why did productivity vary? What is the relationship between
labor productivity and unit cost? The waste behavior in the first round
was high because of all the pressure that the only worker had, he had to
do all fast to deliver more pizzas so the material was used incautiously.
In the other rounds, the pressure was less among the workers because of
the shared work.

From High School Economics, © 2022, by Mexican Council for Economic and Financial Education, CMEEF, Mexico.  All
rights reserved. Material prepared by Jaime M. Velázquez, Ph.D. Authorized for classroom use only.  May not be published
or reprinted without written permission from CMEEF.
 11-R2

5. If the price of pizzas were $150 per unit, with how many workers makes
sense to produce? What if the price dropped to $75, how many workers
would you hire? Calculate profits (revenue minus costs) and EXPLAIN
clearly.
If pizzas were sold at $150 I would like to use fewer workers because it would be
more difficult to sell, also I would need to pay less salary. I would hire 3. Also, the
cost of making the pizzas would be higher with better quality, and that would
affect the revenue with an approximate profit of $50 for each pizza.

If they were sold at $75, the demand would be bigger and I would need more
workers to cover that demand. So I would hire 5 or 6 to make production faster.
This would give a profit of $25 pear pizza.

From High School Economics, © 2022, by Mexican Council for Economic and Financial Education, CMEEF, Mexico.  All
rights reserved. Material prepared by Jaime M. Velázquez, Ph.D. Authorized for classroom use only.  May not be published
or reprinted without written permission from CMEEF.