Refer to the Information Provided in Table 8 -Refer to Table 8

question 279

Multiple Choice

Refer to the information provided in Table 8.1 below to answer the question(s) that follow.
Table 8.1 $$\begin{array} { l c c c } \text { Produce } & \begin{array} { c } \text { Using } \\\text { Techniques }\end{array} & \begin{array} { c } \text { Units of Variable } \\\text { K }\end{array} & \begin{array} { c } \text { Inputs } \\\text { L }\end{array} \\\hline \text { 1 unit of output } & & & \\& \text { A } & 8 & 8 \\& \text { B } & 4 & 12 \\\text { 2 units of output } & & & \\& \text { A } & 14 & 12 \\& \text { B } & 8 & 20 \\3 \text { units of output } & & & \\& \text { A } & 16 & 12 \\& \text { B } & 12 & 22 \\\hline\end{array}$$
-Refer to Table 8.1. Assuming the price of labor (L) is $5 per unit and the price of capital (K) is $10 per unit, what production technique should this firm use to produce 2 units of output?

• A) production technique A
• B) production technique B
• C) The firm is indifferent between production technique A and production technique B.
• D) It is impossible to determine if the firm should select production technique A or B because total fixed costs are not given.

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Definitions:

Right-to-Work Laws

Legislation that prohibits union security agreements between companies and workers' unions, allowing individuals to work without the requirement to join the union or pay dues.

Taft-Hartley Act

An American federal statute from 1947 designed to curtail the actions and influence of labor unions.

AFL-CIO

The American Federation of Labor and Congress of Industrial Organizations, a federation of labor unions in the United States, representing the collective interests of workers.

Strikes

Work stoppages initiated by employees as a form of protest, typically in an effort to gain better pay or working conditions.