TABLE 1 Production Costs for 100 Units of Product X Input Production Production Unit Technique Technique Inputs Price A B Labor $10 A Capital 8 A 5 1 a. Calculate from Table 1 (above), the total cost of Technique A and Technique B. b. Which technique represents the least-cost combination? c. Why will virtually all firms opt for the least-cost technique? d. If Product X sells for $85 each unit, what will be the total profit or loss? 2. What are the advantages of specialization and what are the drawbacks? 3. Explain why the institution of private property forms a basis for pure capitalism. How does this relate to Adam Smith's "invisible hand"? 4. Define risk and discuss the impact to owners, employees and suppliers under the market system. 5. Discuss the pros and cons of a market (or mixed) system. 6. Draw the Simple Circular Flow diagram. Label and describe how the model works