Firm a Can Produce a Unit of Output with 10

question 79

Multiple Choice

Firm A can produce a unit of output with 10 hours of labor and 5 units of material. Firm B can produce a unit of output with 5 hours of labor and 10 units of material. Firm C can produce a unit of output with 10 hours of labor and 10 units of material. If the prices of labor and material are $10 per hour and $5 per unit, respectively, which of these firms is the most technologically efficient?

• A) firm A only
• B) firm B only
• C) firm C only
• D) Firms A and B could both be technologically efficient.

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Definitions:

Gainsharing

A performance-based compensation program where the savings or gains from increased productivity are shared with employees.

Standard Error

A measure of the precision of a sample's mean estimate of a population mean.

Confidence Interval

A variety of values, sourced from sampling data, predicted to hold the value of an undetermined population attribute.

Mean

The average value of a set of numbers, calculated by dividing the sum of all values by the count of values.