Week 9 · Model Workshop

Week 9 Model Workshop: The Catering Kitchen's Cost Table

Principles of Microeconomics Free sample edition

Part 1 — The Big Picture

This week you learned to take a firm's costs apart: fixed cost does not change with output, variable cost does, and total cost adds the two. Marginal cost is what one more unit adds, each average cost is a cost shared out over the units, and a marginal cost below an average pulls the average down while one above pulls it up. You also learned that a profit on the books can hide an economic loss once the owner's own time is counted. In this workshop you build a catering kitchen's cost table in a spreadsheet, find where its averages bottom out, count its profit two ways, and then catch a chatbot's slips on the same kitchen. The habit you build here, asking whether a number is the next unit or the average, carries straight into next week, when a market price meets a cost table like this one.

Time budget: Plan for about 90 minutes.

Part 2 — The Task

Guiding question: For the catering kitchen, what does each extra tray add to the day's costs, where are its average costs lowest, and is the kitchen earning more than its owner's next-best job?

Workshop data: the illustrative catering kitchen's daily costs and one month's books

Source: A small illustrative catering kitchen constructed for this workshop, not real data: one day's fixed and variable costs for cooking 0 to 6 trays of dumplings in one kitchen, and one month of the owner's books with the salary the owner gave up. Every value is printed in Part 4.

Rows: 7 output levels from 0 to 6 trays a day and 1 month of the owner's books (the scaffold tables have 7, 3, and 4 rows)
Columns: trays a day, fixed cost, variable cost, total cost, marginal cost, and the three average costs in dollars; revenue, explicit costs, and the owner's forgone salary in dollars a month
Costs: fixed cost 120 dollars a day; variable cost 0, 60, 80, 90, 140, 210, and 300 dollars a day for 0 to 6 trays

Part 3 — Materials & Procedure

Tools and materials

Desmos (free) or Google Sheets (free)

Ways of working

build-the-supply-and-demand-schedule
shift-vs-move-along-the-curve
compute-elasticity-by-the-midpoint-formula

Procedure

Open a blank Google Sheets file. Label row 1 as Trays, Fixed cost, Variable cost, Total cost, Marginal cost, Average fixed cost, Average variable cost, and Average total cost in columns A to H. Type the trays 0 to 6 in A2 to A8, type 120 in each cell from B2 to B8, and type the variable costs 0, 60, 80, 90, 140, 210, and 300 in C2 to C8. Tool: Desmos (free) or Google Sheets (free). Check: Seven rows hold one output level each, with the same fixed cost in every row of column B.
In D2 type =B2+C2 and copy it down to D8. In E3 type =D3-D2 and copy it down to E8. Tool: Desmos (free) or Google Sheets (free). Check: Column D starts at the fixed cost and rises every row; column E falls for a few rows and then climbs, with nothing in E2 because there is no tray before the first.
In F3 type =B3/A3, in G3 type =C3/A3, and in H3 type =D3/A3, then copy all three down to row 8. Leave row 2 blank, because dividing by zero trays has no meaning. Tool: Desmos (free) or Google Sheets (free). Check: Column F falls every row, while columns G and H each fall to a lowest value and then rise.
Open Desmos. Make a table with trays in the first column and your marginal cost, average variable cost, and average total cost in three more columns, for 1 to 6 trays, and turn on the points for each column so you can see the three patterns. Tool: Desmos (free) or Google Sheets (free). Check: The average-total-cost points sit above the average-variable-cost points, both dip and rise, and the marginal-cost points climb through each dip.
Below the cost table, in rows 11 to 14, type Revenue 9000, Explicit costs 6500, and Owner's forgone salary 2800. Compute accounting profit as revenue minus explicit costs, and economic profit as revenue minus explicit costs minus the forgone salary. Tool: Desmos (free) or Google Sheets (free). Check: Accounting profit is positive and economic profit is a different figure, because the forgone salary is subtracted only in the second.
Fill in the Part 4 tables from your sheet, answer the analysis questions in Part 5, then do the AI-critique step in Part 6 or its equivalent route.

Fallback route

When to use it: Use this route if you cannot open Google Sheets or Desmos, or your device cannot run them.

Complete all three Part 4 tables by hand with any calculator, writing each subtraction or division in words beside its result. Describe the pattern of the marginal-cost and average-cost columns in words instead of plotting them: where each one falls, where it is lowest, and where it rises. Answer all six analysis questions, do the critique step, and submit the same items for equal credit.

This route earns the same credit as the primary route.

Part 4 — The Scaffold

Build the kitchen's cost table one row at a time; this table shows what each tray adds and what each tray costs on average.

Student scaffold table 1
Trays a day	Fixed cost	Variable cost
0	120	0
1	120	60
2	120	80
3	120	90
4	120	140
5	120	210
6	120	300

Compare each new tray's marginal cost with the average total cost before it to see which way the average moves.

Student scaffold table 2
Tray	Its marginal cost	Average total cost one tray earlier	Average total cost now	Did the average fall or rise?
3rd
4th
5th

Count the month's profit two ways, once with only the money paid out and once with the owner's forgone salary too.

Student scaffold table 3
Line	Dollars a month
Revenue	9,000
Explicit costs	6,500
Accounting profit
Economic profit after the 2,800-dollar forgone salary

Part 5 — Analysis Questions

Complete the cost table. What does the 4th tray add to the day's costs, and what is the average total cost at 4 trays? Say in one plain sentence what each figure means for the kitchen.
At what number of trays is average variable cost lowest, at what number is average total cost lowest, and at which tray is marginal cost lowest? Say why the three lowest points do not fall at the same output.
Use the second table to explain why average total cost falls at the 4th tray and rises at the 5th, using the rule that a marginal value below an average pulls it down and one above pulls it up. Then say why the 120 dollars of fixed cost never appears in a marginal cost.
Using the third table, compute the month's accounting profit and economic profit, label each by name, and say in plain words whether the kitchen beats the owner's next-best job and by how much.
Name one limitation of this cost model, such as whole trays only, a single day's costs standing in for every day, or a forgone salary that leaves out things the owner values about running the kitchen, and explain how it could change what you conclude.
Choose one reflection option, (a) or (b), and answer it in 3–4 sentences.

Part 6 — AI-Critique Moment

Choose one equal-credit critique route. Route A: ask an approved AI tool to critique your completed work, then check its response against your own evidence. Route B is the no-AI equivalent printed below.

Approved tools: Claude, Gemini, ChatGPT, Grok, Microsoft Copilot.

Prompt to paste:

I am studying production and costs in an introductory microeconomics course. In an illustrative example, not real data, a small catering kitchen cooks trays of dumplings for events. Its fixed cost is 120 dollars a day for the kitchen lease and equipment, and its variable cost is 0, 60, 80, 90, 140, 210, and 300 dollars a day for 0 to 6 trays. Build its total cost, marginal cost, average fixed cost, average variable cost, and average total cost, tell me what the 4th tray costs, and tell me where average total cost is lowest. The owner's books for one month show revenue of 9,000 dollars and explicit costs of 6,500 dollars, and the owner gave up a job paying 2,800 dollars a month to run the kitchen: what is the kitchen's profit? Then answer: if the price of dumplings rises, what happens to demand for dumplings? How price-sensitive are the kitchen's customers? Is a rule that caterers may charge no less than some amount a price ceiling? If the city taxes each tray, who pays it? What price should the kitchen charge to maximize profit? Should the kitchen cook its own rice because it is the best in town at cooking? Does its cost already include the cooking smells for the neighbors? And is this kitchen a good business that people should support?

Test the response for these likely failures:

Chatbots often answer that the 4th tray costs 65 dollars, reading the average total cost at 4 trays as the cost of one more tray, or they add the 120 dollars of fixed cost into a marginal cost.
Chatbots often report the kitchen's profit as 2,500 dollars a month and call it economic profit.
Chatbots often declare the kitchen a good business that people should support, passing a value judgment off as a result of the cost table.
Chatbots often say a rise in the price of dumplings shifts the demand curve for dumplings left.
Chatbots often say a higher dumpling price makes demand fall.
Chatbots sometimes invent a slope for the kitchen's customers and call it their price elasticity.
Chatbots often label the kitchen's customers elastic or inelastic with no calculation.
Chatbots sometimes say the kitchen should cook its own rice because it is the best in town at cooking.
Chatbots sometimes call a rule that caterers may charge no less than some amount a price ceiling.
Chatbots often say a tax on each tray falls entirely on the kitchen because the kitchen sends the payment.
Chatbots often name a price the kitchen should charge, such as setting price equal to its marginal cost or its average cost.
Chatbots sometimes claim the kitchen's costs already include the cooking smells for the neighbors.

Write 3–5 sentences naming what the chatbot got right and at least two places where it slipped into one of the failures above, such as calling an average cost the cost of one more tray or calling accounting profit economic profit, quoting its words and correcting each by hand against your own completed tables and Chapter 9. For any claim about earlier or later material that this workshop's data cannot check, say so and why.

Equivalent route (no AI required)

No AI account is required for this workshop. This route assesses the same objectives, Objective 5 (describe a firm's short-run production and costs — total, marginal, and average product; diminishing marginal returns; and fixed, variable, total, average, and marginal cost — and distinguish accounting profit from economic profit) and Objective 1 (use the tools of economic modeling — scarcity, opportunity cost, the production possibilities frontier, comparative advantage, and the gains from trade — and distinguish positive statements (what is) from normative statements (what ought to be)), takes comparable effort of about the same 90 minutes, uses the same rubric, and earns the same credit. Instead of the chatbot, critique this flawed analysis of the catering kitchen, printed here in full: "The 4th tray costs 65 dollars, because that is the average total cost at 4 trays, and the 1st tray costs 180 dollars, the total cost at 1 tray. Average total cost starts rising at the 4th tray, because that is where marginal cost starts rising. The kitchen's economic profit is 2,500 dollars a month, so it beats the owner's old job, and that makes it a good business everyone should support. If dumpling prices rise, demand for dumplings shifts left, and the customers are elastic. A rule that caterers may charge no less than some amount is a price ceiling, and a tax on each tray falls entirely on the kitchen because it sends the payment. The kitchen should charge a price equal to its average cost, it should cook its own rice because it is the best in town at cooking, and its costs already include the cooking smells for the neighbors." Mark every slip, name the failure each shows, correct each one by hand against your own tables and Chapter 9, and flag each claim the kitchen's data cannot check. Submit the marked-up analysis with your corrections in place of the chatbot report and share link.

Part 7 — What to Submit

The three completed scaffold tables, from a spreadsheet, Desmos, or by hand
Written answers to all six analysis questions
The chatbot critique report with its share link, or the equivalent route's marked-up correction of the printed flawed analysis

Deliverable:

A short Model Workshop report on the catering kitchen: three completed tables (the daily cost table, the marginal-against-average comparison, and the month's profit counted two ways), written answers to six analysis questions, and a critique of a chatbot's answers about the same kitchen, or, on the equivalent route, a marked-up correction of the printed flawed analysis. Submit in any accessible file type or as a link; a recorded response may be submitted as audio or video with a transcript, or as text. Choose how you show it: written answers, a recorded explanation with a transcript, or a labelled sketch that describes the cost columns in words with a short note; every form is graded by the same criteria.

Rubric

The rubric below shows how each submitted part is evaluated; bands are full, partial, or none.

Workshop evaluation criteria
Criterion	Full	Partial	None
Cost table built and read	Every total cost is fixed plus variable cost, every marginal cost is a difference of two totals, the three averages are each a cost divided by trays, and the 4th tray's marginal cost and the average total cost at 4 trays are each read in a plain sentence.	The table is mostly complete, but one or two entries are wrong or missing, a marginal cost includes the fixed cost, or the plain sentences are missing.	No cost table, or averages and marginal costs computed the same way throughout.
Lowest points and the marginal-average link explained	The lowest average variable cost, the lowest average total cost, and the lowest marginal cost are each located, and the fall and rise of average total cost at the 4th and 5th trays are explained by comparing each marginal cost with the average before it.	The lowest points are located, but the explanation of why the average falls and rises is missing or treats the turn in marginal cost as the turn in the average.	No lowest points located and no explanation.
Profit counted two ways	Accounting profit and economic profit are both computed with the subtractions shown, each is labeled by name, and the economic figure is read as how far the kitchen trails or beats the owner's next-best job.	One profit figure is right, or both are computed but the labels are swapped or missing.	No profit figures, or the forgone salary is ignored with accounting profit called economic profit.
Plain-sentence analysis, limitation, and reflection	All six analysis questions are answered from the kitchen's own numbers, the limitation is named with its effect on a conclusion, and the chosen reflection option is answered with a specific example.	Most questions are answered, but the limitation is missing or vague, or the reflection is missing.	No analysis answers.
AI critique or equivalent correction	The chatbot's reply, or the printed flawed analysis on the equivalent route, is quoted, at least two slips are named with the failure each shows, each is corrected by hand, and claims the kitchen's data cannot check are flagged; either route earns this band equally.	One slip is named and corrected on either route, or slips are named without a correction.	No critique on either route, or the chatbot's reply is pasted without any check.

Quality Gate

Every total cost is fixed cost plus variable cost, and every marginal cost is the difference between two total costs, shown by formula or by hand.
Every average cost is a cost divided by the number of trays, and no average is computed for zero trays.
No marginal cost includes the fixed cost, and no average cost is called the cost of one more tray.
Every profit figure is labeled as accounting profit or economic profit.
Every computed result ends with one plain sentence about what it means for the kitchen or its owner.
No real-world price, wage, statistic, or study is invented anywhere in the submission.
The critique quotes the chatbot, or the printed flawed analysis, and corrects each slip by hand.

Built with The Course Maker · samples.thecoursemaker.com