3.5 A firm can use three different production technologies, with capital and labor requirements at each level of output as follows:

Technology 1 Technology 2 Technology 3 Daily Output K L K L K L 100 4 6 2 8 5 3 150 5 9 3 10 7 5 200 6 12 5 14 8 8 250 7 15 6 18 10 12

a. Suppose the firm is operating in a high-wage country, where capital cost is $150 per unit per day and labor cost is $100 per worker per day. For each level of output, which technology is cheapest?

b. Now suppose the firm is operating in a low-wage country, where capital cost is $150 per unit per day but labor cost is only $60 per unit per day. For each level of output, which technology is cheapest?

c. Suppose the firm moves from a low-wage to a high-wage country but its level of output remains constant at 100 units per day. How will its total employment change?