Answer the Question Using the Following Data,which Show All Available

question 96

Multiple Choice

Answer the question using the following data,which show all available techniques for producing 20 units of a particular commodity: $\begin{array}{c}\quad\quad\quad\quad\quad\quad\quad\text {Resource}\quad\quad\quad\quad\quad\text { Possible Production Techniques }\\\begin{array}{lll}\\\underline{\text {Resource}}\\ \text {Land}\\ \text {Labor}\\ \text {Capital}\\ \text {Entrepreneurial Ability}\end{array}\begin{array}{c}\\\underline{\text {Prices}}\\\$ 4\\3\\3\\2\end{array}\begin{array}{c}\\\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline{\# 1} \\ \quad\quad\quad\quad\quad\quad\quad\quad\quad2 \\\quad\quad\quad\quad\quad\quad\quad\quad\quad1 \\\quad\quad\quad\quad\quad\quad\quad\quad\quad5 \\\quad\quad\quad\quad\quad\quad\quad\quad\quad3\end{array}\begin{array}{c}\\\underline{\# 2 }\\ 4 \\2 \\2 \\1\end{array}\begin{array}{c}\\\underline{\#3 }\\ 2 \\4 \\3 \\1\end{array}\begin{array}{c}\\\underline{\# 4 }\\ 4 \\1 \\1 \\4\end{array}\begin{array}{c}\\\underline{\# 5 }\\ 4 \\3 \\2 \\1\end{array}\end{array}$
Refer to the data.If a new production technique is developed that enables a firm to produce 20 units of output with 3 units of land,3 of labor,1 of capital,and 2 of entrepreneurial ability,this technique would:

• A) not be adopted because,although it reduces production costs,it does not increase profit.
• B) be adopted because it would lower production costs and increase economic profit.
• C) not be adopted because it entails higher production costs than other available techniques.
• D) be adopted,even though economic profits would be reduced slightly.

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