Evaluating a Production Technology Change
A factory producing 100 metres of cloth currently uses a technology requiring 5 workers and 5 tons of an energy input. A consultant recommends switching to a different technology that uses 4 workers and 2 tons of the energy input, claiming it will reduce costs. Given a wage of £10 per worker and an energy price of £20 per ton, is the consultant's recommendation economically sound? Justify your conclusion with cost calculations for both technologies.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
Evaluation in Bloom's Taxonomy
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Adapting Production to Changing Input Prices
A firm is considering different technologies to produce 100 metres of cloth. One available technology requires 1 worker and 6 tons of an energy input. If the wage for a worker is £10 and the price of a ton of the energy input is £20, what is the total cost of production using this technology?
A firm produces 100 metres of cloth and is evaluating different production technologies. Given a wage of £10 per worker and an energy input price of £20 per ton, match each technology (described by its input requirements) to its total production cost.
A textile firm is producing 100 metres of cloth. Given a wage of £10 per worker and an energy input price of £20 per ton, a production technology requiring 5 workers and 5 tons of the energy input is more cost-effective than a technology requiring 4 workers and 2 tons of the energy input.
Impact of Changing Input Prices on Technology Choice
Cost-Minimization in Production
A textile factory manager is deciding which technology to use for producing 100 metres of cloth. The wage for a worker is £10, and the price per ton of an energy input is £20. The manager has the following options:
- Technology A: 1 worker, 6 tons of energy input
- Technology B: 4 workers, 2 tons of energy input
- Technology D: 5 workers, 5 tons of energy input
- Technology E: 10 workers, 1 ton of energy input
Which of the following statements correctly evaluates the options to identify the most cost-effective technology?
Evaluating a Production Technology Change
Technology B as the Least-Cost Technology at w=£10, p=£20
Analysis of Production Cost Trade-offs
Evaluating a Consultant's Technology Recommendation