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B11. Suppose a firm produces output using only labour and a natural resource. Suppose there is a new technology that allows the firm to produce
B11.
Suppose a firm produces output using only labour and a natural resource.
Suppose there is a new
technology that allows the firm to produce a higher level of output for every combination of labour and the
natural resource.
a.
On a diagram draw how the new technology will affect the isoquants for producing a particular level
of output.
[2 marks
Answer: New isoquant should be closer to the origin
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