a. What technique will you want to use if the price of a bar of soap falls to $2.75? (Click to select) Which technique will you use if the price of a bar of soap rises to $4? | (Click to select) ' Which technique will you use if the price of a bar of soap rises to $5? (Click to select) b. How many bars of soap will you want to produce if the price of a bar of soap falls to $2.00? O Five: It is profitable to produce bars of soap at this selling price. O Zero: It is not profitable to produce bars of soap at this selling price.
a. What technique will you want to use if the price of a bar of soap falls to $2.75? (Click to select) Which technique will you use if the price of a bar of soap rises to $4? | (Click to select) ' Which technique will you use if the price of a bar of soap rises to $5? (Click to select) b. How many bars of soap will you want to produce if the price of a bar of soap falls to $2.00? O Five: It is profitable to produce bars of soap at this selling price. O Zero: It is not profitable to produce bars of soap at this selling price.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
A and B
Transcribed Image Text:The table below contains information on three techniques for producing $15 worth of bar soap. Assume that we specified "$15 worth
of bar soap" because soap costs $3 per bar and all three techniques produce 5 bars of soap ($15 = $3 per bar x 5 bars). So you know
each technique produces 5 bars of soap.
Units of Resource
Technique 1
Technique 2
Technique 3
Price per
Unit
Resource
Units
Cost
Units
Cost
Units
Cost
Labor
$2
4
$8
2
$4
$2
Land
1
1
1
3
3
4
4
Capital
3
3
1
3
2
Entrepreneurial ability
3
3
3
1
3
Total cost of $15 worth of bar soap
$15
$13
$15
a. What technique will you want to use if the price of a bar of soap falls to $2.75?
|(Click to select) V
Which technique will you use if the price of a bar of soap rises to $4?
(Click to select)
) V
Which technique will you use if the price of a bar of soap rises to $5?
(Click to select)
b. How many bars of soap will you want to produce if the price of a bar of soap falls to $2.00?
O Five: It is profitable to produce bars of soap at this selling price.
O Zero: It is not profitable to produce bars of soap at this selling price.
c. Suppose that the price of soap is again $3 per bar but that the prices of all four resources are now $1 per unit. Which is now the
least-profitable technique?
(Click to select) V
d. If the resource prices return to their original levels (those shown in the table) but a new technique is invented that can produce 3
bars of soap (yes, 3 bars, not 5 bars!), using 1 unit of each of the four resources, will firms prefer the new technique?
O Yes, they will prefer the new technique.
O No, they will still prefer technique 2.
O No, they will still prefer technique 1.
O No, they will still prefer technique 3.
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