Two Firms Can Use Five Different Technologies to Produce the Same

question 26

Multiple Choice

Two firms can use five different technologies to produce the same quantity of output: 1,2,3,4 and 5.The first technology is the cheapest,but also the dirtiest.The fifth technology is the most expensive,but results in the lowest levels of pollution.The amount of pollution emitted by each firm and the cost of the technologies are shown in the table. $\begin{array}{lllll}\text { Technology } & 1 & 2 & 3 & 4 & 5 \\\text { Emissions } & 10 \text { tons } & 8 \text { tons } & 6 \text { tons } & 4 \text { tons } & 2 \text { tons } \\\text { Acme's Costs } & \$ 750 & \$ 800 & \$ 1000 & \$ 1400 & \$ 2000 \\\text { FirmCo's Costs } & \$ 500 & \$ 700 & \$ 1200 & \$ 2200 & \$ 4000\end{array}$
Suppose the firms are both currently using technology 1,and that the government adopts rules requiring each firm to reduce pollution by 20%.To comply,the firms will adopt technology ___ for a total cost of __________.

• A) 1;$1250.
• B) 2;$1500.
• C) 3;$2200.
• D) 4;$3600.

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Definitions:

Operations Management

A field of management that deals with designing, controlling, and redesigning business operations in the production of goods or services.

Ethical Challenges

Moral dilemmas and issues that arise in the practice of business and professional activities, requiring deliberation and decision-making.

Social Challenges

Issues that affect individuals or communities, related to inequality, health, education, and access to resources, requiring collective action for resolution.

Operations-Related Tasks

Activities and duties associated with managing and improving the processes that produce goods or deliver services in an organization.