Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 2 - The Market System and the Circular Flow - Questions - Page 44: 7b

Answer

The firm will adopt Technique 4, as the overall cost of manufacturing product A would be less than that using Techniques 1, 2, or 3.

Work Step by Step

Techniques 1, 2, and 3 required \$35, \$34, and \$35 respectively to produce A. By adding up all of the resource prices in Technique 4, $(3\times2)+(4\times2)+(2\times6)+(2\times3)$, we get \$32, which is less than cost of all of the other techniques, and thus the rational economic choice.
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