In the following diagram you are given twotechnologies, A and B, which can produce100 metres of cloth. Technology A uses 1worker and 4 tonnes of coal, whiletechnology B uses 4 workers and 2 tonnesof coal. The diagram also depicts threeexamples of isocosts, NM, GF and JH. Thewage cost and the price of coal aredenoted by wand p, respectively. Your firmcompetes with many other firms in thiscloth market. In period 1, the wage costand the price of coal are (w, p) = (10, 20)and the price of the cloth is 2 per metre. Allfirms employ technology B in period 1. Inperiod 2, the wage cost and the price ofcoal change to (w, p) = (20, 10). Which ofthe following statements is correct?Tonnes of coal1098Number of workers Select one:a.Ob.C.O d.If a few firms are unable to switchto technology A from B then thesefirms will go bankrupt.If all firms are able to switch totechnology A then they will allenjoy positive innovation rents,both in the short run and long run.The first firm to adopt technologyA in period 2 is called the initiator.If your firm is the only firmswitching to technology A inperiod 2, then your innovation rentis $140 per 100 metres of cloth.

Given information Technology A: 1 worker and 4 tons of coal---(Capital intensive) Technology B: 4…

In the following diagram you are given two technologies, A and B, which can produce 100 metres of cloth. Technology A uses 1 worker and 4 tonnes of coal, while technology B uses 4 workers and 2 tonnes of coal. The diagram also depicts three examples of isocosts, NM, GF and JH. The wage cost and the price of coal are denoted by wand p, respectively. Your firm competes with many other firms in this cloth market. In period 1, the wage cost and the price of coal are (w, p) = (10, 20) and the price of the cloth is 2 per metre. All

In the following diagram you are given two technologies, A and B, which can produce 100 metres of cloth. Technology A uses 1 worker and 4 tonnes of coal, while technology B uses 4 workers and 2 tonnes of coal. The diagram also depicts three examples of isocosts, NM, GF and JH. The wage cost and the price of coal are denoted by wand p, respectively. Your firm competes with many other firms in this cloth market. In period 1, the wage cost and the price of coal are (w, p) = (10, 20) and the price of the cloth is 2 per metre. All

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section7.5: Long-run Production Costs

Problem 1YTE

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