5.. Alternative ways of making 100 shirts a day are in the table below: Method Labor (hours) Capital (machines) A 10 50 в 50 20 40 с 20 D 100 10 a. Which methods are technologically efficient? b. Which method is economically efficient if: (i) The wage rate is $1 an hour and the rental cost of a machine is $100 an hour? (ii) The wage rate is $5 an hour and the rental cost of a machine is $50 an hour? (iii) The wage rate is $50 an hour and the rental cost of a machine is $5 an hour?

5.. Alternative ways of making 100 shirts a day are in the table below: Method Labor (hours) Capital (machines) A 10 50 в 50 20 40 с 20 D 100 10 a. Which methods are technologically efficient? b. Which method is economically efficient if: (i) The wage rate is $1 an hour and the rental cost of a machine is $100 an hour? (ii) The wage rate is $5 an hour and the rental cost of a machine is $50 an hour? (iii) The wage rate is $50 an hour and the rental cost of a machine is $5 an hour?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 42P: A small company that shovels sidewalks and driveways has 100 homes signed up for its services this...

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A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method Choices are: Method 1: 50 units of labor, 10 units of capital Method 2: 20 units of labor, 40 units of capital Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs 400, what is the best production method? What method should the company use if the cost of labor rises to $20/unit?
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Alternative ways of making 100 shirts a day are in the table below: Method Labor (hours) Capital (machines) A 10 50 B 20 40 C 50 20 D 100 10 1. Which methods are technologically efficient?