The table below shows three different technologies used to produce various levels of output. Output Tech 1 Tech 2 Tech 3 K 6 7 K K 11 2 3 7 10 14 1 4 4 3 6 8 10 12 13 5 8 4 14 12 7 10 5 20 15 15 12 12 26 16 21 11 14 14 7 32 (a) In general, which input technology is the most desirable? (b) If the price of capital is $4 per unit and the price of labor is $2 per unit which technology will be chosen to produce 11l units of output? (c) Will this still be cheapest if the input prices change to $3 and $3, respectively? (d) Or $2 and $4, respectively? (c) For cach of the three sets of prices in (b), (c), and (d) above, establish which technology is chcapest at cach output level.

The table below shows three different technologies used to produce various levels of output. Output Tech 1 Tech 2 Tech 3 K 6 7 K K 11 2 3 7 10 14 1 4 4 3 6 8 10 12 13 5 8 4 14 12 7 10 5 20 15 15 12 12 26 16 21 11 14 14 7 32 (a) In general, which input technology is the most desirable? (b) If the price of capital is $4 per unit and the price of labor is $2 per unit which technology will be chosen to produce 11l units of output? (c) Will this still be cheapest if the input prices change to $3 and $3, respectively? (d) Or $2 and $4, respectively? (c) For cach of the three sets of prices in (b), (c), and (d) above, establish which technology is chcapest at cach output level.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter2: Choice In A World Of Scarcity

Section: Chapter Questions

Problem 2SCQ: Return to the example in Figure 2.4. Suppose there is an improvement in medical technology that...

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