Refer to the Information Provided in Table 19 -Refer to Table 19

question 101

Multiple Choice

Refer to the information provided in Table 19.5 below to answer the questions that follow.
Capital and labor each cost $1 per unit. The firm produces 1,000 units of output.
Table 19.5
$$\begin{array} { | c | c c | } & \begin{array} { c } \text { Input } \\\text { Requirements } \\\text { per unit of } \\\text { Output }\end{array} \\\text { Technology } & K& L \\\hline \text { A } & 5 & 2 \\\hline \text { B } & 3 & 5 \\\hline\end{array}$$
-Refer to Table 19.5. Suppose the government imposes a 100% tax on capital. Which technology will the firm use?

• A) Technology A
• B) Technology B
• C) Either technology A or B-the firm is indifferent between the two.
• D) The answer is impossible to determine with the given information.

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Definitions:

Consumer Decision Making

The process by which consumers identify their needs, gather information, evaluate alternatives, and make choices regarding products and services.

Shipping Costs

Expenses involved in transporting goods from one location to another.

Bias

A tendency, inclination, or prejudice towards or against something or someone, often in a way considered to be unfair.

Anchoring

Tendency to rely heavily on one prior (suggested) piece of information when making a decision.