Firm a Can Produce a Unit of Output with 10

question 44

Multiple Choice

Firm A can produce a unit of output with 10 hours of labour and 5 units of capital. Firm B can produce a unit of output with 5 hours of labour and 10 units of capital. Firm C can produce a unit of output with 10 hours of labour and 10 units of capital. If the prices of labour and material are $10 and $5, respectively which firm is technologically efficient?

• A)A only
• B)B only
• C)C only
• D)A and B
• E)A and C

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Definitions:

Failing Business

A business that is unable to continue operating due to financial difficulties, leading to bankruptcy or liquidation.

Economic Failures

Situations where market outcomes lead to inefficiency, often resulting in resources not being allocated optimally.

Commercial Failures

Situations where businesses are unable to continue operations due to financial problems, often leading to bankruptcy or liquidation.

Golden Parachutes

Large financial compensation packages awarded to top executives if they are forced out of a company due to a takeover or merger, intended to discourage hostile takeovers.